Google Q1 Earnings: What to Expect

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Image: Jeff Chiu/Associated Press

By Seth Fiegerman2014-04-16 14:50:48 UTC

When Google reported its fourth quarter earnings in late January, much of the focus was on mounting losses from Motorola Mobility and the upcoming stock split. When Google reports earnings after the market closes on Wednesday, the focus will likely be back on its core business: advertising.

Google is expected to report earnings of $6.40 per share on revenue of $15.52 billion, according to analysts surveyed by Thomson Reuters, compared to revenue of $13.97 billion during the same quarter a year earlier.

See also: Google in 2014: The World Is (Almost) Its Oyster

Analysts are expecting Google to post double-digit percentage growth in advertising revenue this quarter compared to a year earlier. Brian Wieser, an analyst with Pivotal Research Group, wrote in an investor note that he expects total ad revenue to grow by 16%, with display ads up about 30% and search ads up about 10%.

The average cost-per-click for Google ads has been on the decline as more consumers use Google services on mobile devices, which command lower ad rates. In recent months, Google has been working to boost ad spend on mobile with its enhanced campaigns, which may eventually reverse the trend of declining CPC rates by streamlining ad buying across desktop and mobile, but probably not yet.

"Generally speaking, our checks suggest that GEC [Google Enhanced Campaigns] is driving more investment in mobile, though in some cases at the expense of desktop spend," Shyam Patil, an analyst with Wedbush, wrote in an investor note.

As always, analysts will likely raise questions on the earnings call about Google projects like Fiber and Glass as well as recent high-profile acquisitions of companies like Nest and Titan Aerospace. As always, the answers the company's executives provide will likely be vague.

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Topics: Business, stocks