This column originally appeared on April 26 on Real Money, our premium site for active traders. Click here to get great columns like this.
Though Thursday is hardly the first time that multiple high-profile tech companies are due to report earnings at the same time, it’s pretty rare to see four tech giants with $150 billion-plus market caps — three of whom have $400 billion-plus market caps — reporting within minutes of each other. But that’s what Alphabet/Google (GOOGL) , Amazon.com (AMZN) , Microsoft (MSFT) and Intel are set to do after Thursday’s close.
For those who plan to try and follow the numbers and commentary that these firms plan to simultaneously deliver, here’s a look at what’s expected of them going into earnings, and what’s worth keeping an eye on as they report.
The Google parent’s shares slipped in January after posting mixed Q4 results (EPS beat, while revenue missed), but is still up 12% on the year with the help of rising equity markets. Shares trade for 23 times a 2018 EPS consensus of $39.29.
Analysts on average expect Alphabet to report revenue of $19.8 billion (up 20% annually) after backing out traffic acquisition payments to partners (TAC), and adjusted EPS of $9.42 (up 26%). Google hasn’t historically provided sales or EPS guidance with its earnings, and there’s no reason to think it will start on Thursday.
What to watch:
- How strong paid click (paid ad click/impression) growth remains. Thanks to strong mobile search and YouTube growth, Google’s paid clicks rose 36% annually in Q4, and 43% on Google’s sites/apps. With recent growth having been propped up by mobile search changes that happened in the second half of 2015, the consensus is for paid click growth to slow to 26% in Q1 (30% on Google sites).
The growing habit among Amazon shoppers to go directly to Amazon’s app rather than search for products on Google is a potential headwind, and rising Google Maps ad traffic a potential tailwind. The advertiser losses that YouTube saw over its hosting of extremist content are unlikely to have a big Q1 impact, since the issue only blew up in mid-March, but any commentary on the matter will be closely watched.
- Whether the decline in Google’s cost per click (CPC, average ad price) slowed. CPC fell 15% annually in Q1 due to the lower prices attached to smartphone search and YouTube ads. Google has been trying to boost ad prices by improving the rates at which smartphone ad clicks convert into sales, and by growing local business ad sales. CPC is expected to drop 11% in Q1.
- If TAC (10% of Google ad revenue in Q4) continues to rise as a percentage of revenue. Mobile ad sales carry a higher TAC overall than PC ad sales, due to revenue-sharing payments made to phone OEMs, carriers and others.
- The “Google Other” revenue line, which covers Google’s non-advertising…