When Google reports its fourth quarter numbers after the bell tonight, it's not going to be a question of whether the company beats the Street, but by how much, according to the myriad analysts I've been talking to.
That's how sure they are that this company's earnings are in overdrive.
Officially, the consensus is $6.48 a share on $4.9 billion in net revenue (excluding traffic acquisition costs). I say "officially" because I really can't find anyone below that number, and if it's the "average," I'm not sure how we got there. That $6.48 EPS number, by the way, was a nickel lower just two days ago, so we're already seeing these numbers begin a steady creep north ahead of the report tonight. And just yesterday, FBR raised its fourth quarter EPS estimates to $6.65 from $6.38, and its revenue estimate jumped to $4.928 billion from $4.683 billion. Over at WhisperNumber.com, the EPS number is $6.54, and it bears reporting here that Google has beaten the whisper in 16 quarters, and missed the whisper in 5 quarters.
Other key metrics to follow: Google Sites should generate $4.45 billion; Networks $1.97 billion; Licensing revenue should reach $208 million; Paid Clicks should have risen 13 percent year over year. Citi's Mark Mahaney is looking for $6.33 and $4.84 billion in net revenue. Paid Click growth should grow 13 percent; Web Sites $4.39 billion; Network Sites $1.98 billion; North American revenue growth 7 percent quarter to quarter; International 14 percent; and Capex of around $525 million.
Like eBay yesterday, Google stands to benefit broadly from the influx of online consumer spending during the fourth quarter. Fact is, Google has been able to thrive in a soft economy because companies looking for a little extra bang for their advertising buck turned to the online leader and saw a nice return. Now that the economy is improving, those same advertisers are likely to spend even more, now that they see how strategically compelling the Google platform can be, and because they now have more money to spend. And with no real competition out there, and Google only extending the chasm between itself and one-time rival Yahoo, the company is sitting pretty.
But that's all search centric.
There are obviously some other key issues facing Google during this earnings season that cut right to the core of where this company goes from here. Google has had such difficulty trying to come up with meaningful revenue streams outside of search, and just when you think they might have something, something else comes along that torpedoes it. Case in point: The mobile operating system Android is now on handsets offered by all the major wireless carriers, including AT&T, Verizon, Sprint, T-Mobile. But the company's efforts to launch its own branded handset, essentially a hopped up HTC smart phone already out in the market, seem to be floundering. Sales seem soft, there doesn't seem to be a lot of traction in the marketplace, and the headlines about lousy customer support on its new online smart phone shopping destination drown out any good news that might be there.