Google (GOOG) Gains Ahead of Q1 Report; Street May Be 'A Bit' Too Aggressive

Google (NASDAQ: GOOG) (NASDAQ: GOOGL) is up solidly (+1.9%) into earnings after the close. Analysts on average are looking for EPS of $6.60 on revenues of $17.5 billion, representing growth of 5.3% and 13.6% respectively.

On average, the company misses EPS by 2.7% with shares rising 1.6% on average the week following earnings. Last quarter, shares rose 4.8% in the day immediately following earnings despite missing on both the top and bottom line.

RBC Capital analyst Mark Mahaney said recently that based on intra-quarter data points and their model sensitivity analysis, they believe Street estimates are a bit aggressive for Q1, with downside variance more likely than upside variance. Although Google won’t provide guidance, they note the material FX headwinds that it continues to face.

For Q1 they are expecting Gross Revenue of $16.93B, Net Revenue of $13.57B, Non-GAAP Operating Income of $5.34B, and Non-GAAP EPS of $6.28. Gross Revenue and Non-GAAP EPS estimates are a bit below the Street at $17.41B / $6.61.

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