Google parent Alphabet expected to report strong margins growth for 3Q
Last updated: 11:57 24 Oct 2023 EDT, First published: 16:12 19 Oct 2023 EDT
Google’s parent company Alphabet Inc (NASDAQ:GOOG) will report its third quarter financial results after the closing bell on Tuesday, October 24, and it is expected to post strong year-over-year revenue, earnings and margin growth.
Shares of Alphabet traded higher ahead of its results, adding 1.8% at US$139 at noon on Tuesday.
Wall Street analysts expect the tech giant to report a 10.3% increase in revenue from $57.3 billion in the year-ago quarter to $63.1 billion.
Earnings per share (EPS) is expected to climb 36.8% from $1.06 to $1.45.
Analysts at the Bank of America (BoA) expect the company to deliver both revenue and EPS above Street expectations on their positive view of Alphabet's growth, margin expansion, and leading artificial intelligence (AI) capabilities.
“We remain constructive on Google and expect continued second-half acceleration in Search and YouTube growth driven by macro improvements, new advertiser AI tools, ramping shorts monetization, and forex,” they wrote in a note to clients.
“Gemini release could be a catalyst, and believe Street is underestimating the benefits of AI integration into search, and potential monetization benefit over time.”
The BoA analysts wrote that with job openings below pre-pandemic levels and recruiter layoffs and continued cost control efforts, they expect 3Q core margins to be up 400 basis points year-over-year to 34.3%.
Margins improvement is also expected to be supported by the acceleration of Search and decelerating costs.
- Updated with share price movement -
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