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Google Earnings Preview: What Wall Street's Saying

JMP Securities analyst Ronald Josey (Market Outperform, $725 PT)

"Google reports 1Q14 results on April 16 after the close and we expect it to report another strong quarter given continued strength across Search, Mobile, PLA's, YouTube, and Display, and the continued adoption of Android devices resulting in strong Licensing & Other revenue. Specifically, we'll be watching for: 1) O&O revenue growth, paid clicks, and CPC growth;
2) display share gains given continued upfront agency commitments and the upcoming NewFronts; 3) Google's evolving strategy around travel given its recent announcement with Room 77; and 4) Licensing & Other growth. We continue to believe Google is well positioned across most growth drivers on the Internet and that through Enhanced Campaigns, PLAs, and other ad innovations, Google is delivering upon its promise of cross-platform solutions. For 2014, we now project net revenue of $53.6 billion (+24% Y/Y), EBITDA of $26.7 billion (+18% Y/Y, 49.7% margin) and PF EPS of $27.75."

BGC Partners analyst Colin Gillis (Hold, $590 PT)

"March quarter results may prove messy related to three factors: 1) Motorola revenue and expenses being moved into discontinued operations. We expect this should result in a positive impact to earnings, as Motorola losses have been a drag on results. 2) The company has split its stock, resulting in a doubling of shares. This is a smaller impact but it may make the magnitude of any upside/downside look smaller (a ten cent earnings beat will now look like 5 cents, same net income just more shares). 3) March quarter results are seasonally weak and can be negatively impacted by higher tax rates at the start of the year, a negative impact on earnings. Finally, the trend of click pricing decline is likely to continue, with paid clicks growing 22% and click pricing down 6% in our estimate. We are positive on the pending sale of Motorola, and increase our price target to reflect the transaction, but we look to see if the stock pulls back on earnings."

FBN Securities analyst Shebly Seyraf (Outperform, $700 PT)

"For the FQ1 quarter, we expect GOOGL to report Google Gross revenue of $15.6B (+20% Y/Y vs. consensus of $15.5B) and NG EPS of $6.23 (vs. consensus of $6.30). We are modeling Paid Click/CPC Y/Y growth of 31%/-8% (vs. consensus of 29%/-8%), resulting in Google Website revenue of $10.6B (higher than consensus of $10.47B). We expect Google Network revenue to be $3.4B, up 4% Y/Y, but there is upside here as the company laps easy compares (remember that Google Network revenue was negatively impacted a year ago by policy changes made in late 2012)."

Topeka Capital Markets analyst Victor Anthony (Buy, $657 PT)

"We have been testing the explorer version of Google Glass over the past several weeks along our commutes, at our kids sporting activities, and other social events, and we let everyday consumers (non-techies) try out the device. Outside of battery life, we were pleased with the functionality of Glass and found the hands-free aspect compelling. The good news for Google is that consumer awareness of Glass is extremely high. The bad news is that while everyone appeared delighted by the functionality of Glass, few viewed Glass as a must-have device. Deals with eyeglass makers will go a long way to help change that perception with a more consumer friendly version, likely later this year. However, while the enterprise use case is growing, we are unconvinced that consumer demand will be sufficient to drive the product to scale and mainstream status like the iPad."

--Written by Chris Ciaccia in New York

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