Google was restructured last year, set up a parent company Alphabet, the core Internet business with driverless cars, smart homes and health care innovations such as the business was separated. On Monday, the Alphabet will be published for the first time that the two major business revenues, operating profit and capital expenditures, and provides historical data back in 2013.
According to statistics from Thomson Reuters, analysts on average expect, parent company Alphabet fourth-quarter revenue of $ 21 billion, and earnings per share of $ 8.09. However, investors and analysts for the Alphabet individual performance may be more interested in two pieces.
Due to investments in new projects, Alphabet margins are declining in recent years. MoffettNathanson maikeer·nasangsen, Research Analyst (Michael Nathanson) estimates that in 2015, Alphabet of profit before interest and tax was 26.2%, down from 30.6% in 2007. But he estimated that Google Internet business the profit margin compared to 31.5% last year, higher than the 2007 level.
Nasangsen estimates that Google Internet business last year's earnings before interest, taxes, depreciation and amortization (EBITDA) of $ 32 billion, and "other" losses of us $ 2.3 billion. He said: "Google's earnings power should be stronger, but in recent years we have not seen that, because Google is investing in new services, which dragged down the overall profitability. If the latest data show that Google's core business does well, it will be good news. ”
Nasangsen believe that greater transparency will bring value. Last December, he estimates that Google's core business strong profitability, so the Alphabet with a total value of $ 582.5 billion, or us $ 840 per share, up from a previous estimate of $ 558.5 billion, or $ 805 per share. Alphabet shares closed Friday at $ 761.35 rose $ 13.05.
In other words, reveal core business will give the company a $ 24 billion market value, more than twice times market value of Twitter.
So there is precedent. In the past 1.5 years, Amazon, Netflix, and Expedia has released more detailed information for different business units, and 3 companies share price subsequently rose.
Amazon released the latest data shows that cloud computing business profitability better than investors expected. Expedia announced losses from elong to allow investors to better judge the profitability of the core business of the company.
RBC Capital Markets analyst Mark Mahaney (Mark Mahaney) expects Alphabet Expedia earnings up to the same effect. He said: "Google's core business profitability is much stronger than the Alphabet as a whole. How much of the problem lies in the high, and profitability improved. We hope to see progress in this regard. ”
Alphabet's share price has risen recently. Announced on October 22 that it would release more detailed earnings figures, the company's shares rose more than 13%. NASDAQ decline over the same period last 5%.
But Mizuho Securities United States analyst nier·duoshi (Neil Doshi) stated that Google's core business margins may be dragging down the investment in cloud computing. In the cloud computing market, Google is running after the Amazon.
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