Shares of Alphabet Inc (NASDAQ:GOOGL) fell almost 2% on Monday, just days before the scheduled release of its third-quarter earnings report. Ahead of Alphabet’s much-anticipated Q3 earnings, due out Thursday, investors might consider taking a harder look at what to expect from the company as it bolsters new business segments.
Alphabet still relies heavily on Google-related advertising revenues, which are expected to pop 18%, according to our exclusive non-financial metrics consensus estimate file. Right off the bat, projected advertising revenue growth should make investors happy, as overall growth in total paid clicks helps to curb lower mobile cost-per-click rates.
Continued growth in its all-important advertising segment has helped GOOGL shares surge nearly 27% this year. However, our current consensus estimates call for the tech giant’s quarterly earnings to fall 7.4% to $8.39 per share. Nevertheless, Alphabet’s revenues are projected to jump 20.1% to $21.94 billion, spurred in part by a heightened commitment to new ventures.
Since earnings and revenues account for only a small portion of everything that investors take into account when assessing a company’s quarterly earnings report, it is important to focus in on those new ventures.
Alphabet has invested in artificial intelligence, cloud computing, ecommerce, and mobile payments—all of which are represented in its “Other Bets” unit.
While “Other Bets” does not generate a significant amount of revenue right now, a few of Alphabet’s side projects, including Google Fiber, Nest, and Verily, have started to bear fruit. Based on our consensus estimates, we expect Alphabet’s Other Bets revenues to soar 35% year-over-year to $267 million.
Even if Alphabet’s Other Bets business doesn’t grow as much as we currently project, investors should be excited that the company isn’t resting entirely on its search engine business.
And make sure to check back here for our full analysis of Alphabet’s actual results later this week!
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