Search giant Google, Inc. (NASDAQ:GOOG) is expected to report strong quarterly results when it reports its first quarter numbers on April 11.
Wall Street expects Google to earn $9.64 a share on revenue of $8.13 billion, according to analysts polled by Thomson Reuters. The estimate implies a 19 percent increase in earnings and 24.4 percent rise in revenues from last year when it earned $8.08 a share on revenue of $6.54 billion.
In the past four quarters, Google has managed to beat earnings estimates twice, while missing them on two occasions. Three months ago, the average earnings estimate for the quarter was $10.12 a share, and in the past 30 days, it has come down to $9.63 a share.
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In the fourth quarter, Google's earnings per share and revenue missed estimates despite rising 9 percent and 28 percent, respectively, from the previous year.
Google's net income for the fourth quarter rose to $2.71 billion, or $8.22 a share from $2.54 billion or $7.81 a share, in the prior year quarter. Excluding items, Google earned $3.13 billion or $9.50 a share, up from $2.85 billion or $8.75 a share last year.
Google's revenue improved 25 percent to $10.58 billion for the quarter and excluding traffic acquisition costs, revenues for the quarter rose to $8.13 billion from $6.37 billion last year.
Analysts expected earnings of $10.49 a share on revenue of $8.41 billion for the fourth quarter.
In the past four quarters, Google had delivered double-digits growth in net income for three quarters and revenue increases in double-digits in its past four quarters. Google is expected to continue this momentum with strong first quarter results.
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During the quarter, Google said that it has combined the Android Market, Google Music, and the Google eBookstore into a single brand namely Google Play.
Earlier this month, Google unveiled Project Glass, its digitized headgear which has been alternately referred to as "augmented reality" glasses. The glasses perform the same tasks as a smartphone, real time weather, directions/maps, photography and video chat displayed directly in one's field of vision.
Meanwhile, Google's mobile operating system Android has captured 50.1 percent of the smartphone market followed by Apple, which nabbed a 30.2 percent share, according to a study released by ComScore.
As in the previous quarters, investors will focus on margins and operating expense growth, which could be driven by headcount additions.
"We expect Google to report net revenue growth in-line with the consensus 0% Q/Q estimate, and like most quarters, the key swing factor is likely to be margins, which we estimate down 200bps Q/Q to 53.9% based on typical expense seasonality (in line with consensus)," RBC Capital Markets analyst Ross Sandler wrote in a note to clients.
The analyst said his channel checks point to another quarter of solid revenue trends for Google. He sees US search tracking up in the high-teens from last year, UK up about 12-15 percent, and the rest of the world up 35 percent, excluding forex.
Meanwhile, Google continues to make considerable strides in both display and mobile areas, which should add about 500 basis points to global growth.
"While 1Q12 may not be the break-out quarter in 2012, primarily due to the unfavorable FX impact to CPCs and hence limited surprise factor, we continue to want to own shares into the print. Shares remain Outperform rated, our price target remains $800," Sandler noted.
Shares of Google gained 9 percent in the past one year and rose only 2 percent in the last three months.