Alphabet (Google) reports results on Tuesday, July 26, after the close of trading.
Analyst estimates that second-quarter revenue grew 14% y/y to $58.14 billion, while earnings increased by 6% to $1.39 per share. Gross margins are forecast to have fallen sharply in the second quarter to 62.25% from 69.98% in the second quarter of 2021.
Google Cloud is forecast to see its revenue rise by 36.9% to $6.3 billion, while YouTube advertising revenue is estimated to have grown by 7.9% to $7.55 billion.
Investors follow a significant metric for Alphabet: Traffic Acquisition Costs (TAC). That’s estimated to have risen by 12.65% to $12.3 billion. Should the company report a higher than expected TAC number, it would be viewed negatively by the market.
Analysts have adjusted their Google advertising revenue estimates down from $58.3 billion recently. Despite revenue estimates coming down, they’re still at the upper end of the range since the middle of 2021, indicating that analysts are not expecting a significant slowdown in Alphabet’s Ad business yet, setting a high bar for the company to beat.
Overall revenue and earnings estimates have also not been adjusted by much. So if there are outside pressures from weakening ad sales, they have not been reflected in earnings or revenue estimates, which means Alphabet has to deliver this quarter and beat those elevated forecasts.
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