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Google Inc. (GOOG): Q2 Earnings Preview – Searching For $1,000

 July 15, 2013 10:08 AM

(By Rich Bieglmeier) Google Inc. (GOOG) will hold its quarterly conference call to discuss second quarter 2013 financial results on Thursday, July 18th at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). The live webcast of Google's earnings conference call can be accessed at investor.google.com/webcast.html.

Wall Street anticipates GOOG will earn $10.79 for the quarter. iStock expects the internet information provider to report earnings that will hit Wall Street's consensus number. The iEstimate is $10.79, too.

Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world. If you don't know, Google it.

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The obvious question is whether Thursday's profit scorecard will be enough to get the NASDAQ 100 member to $1,000. Well, at least eventually. Shares would have to jump 8.43% to hit the magical four digits. Now, in the last four years the stock jumped more than enough thrice in the three days surrounding EPS to push GOOG to $1,000 gaining 14.3%, 12.8%, and 9.9%.

Overall, Google shares have gone green in the three days bookending EPS nine of the last 16 quarterly checkups adding an average of 6.59%, which would put a "G" in close range depending on where the stock is trading pre-EPS.

An unlucky seven times shareholder's watched Google stock search for firm footing, dropping from 0.70% to 9.70% with an average three-day round trip of -5.51%.

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Based on some of what we are reading, iStock would expect Q2 to be fairly strong for the behemoth.

According to IgnitionOne, tablet search spending increased by 116% year-over-year in Q2, and smartphone search spending grew by 106%. Those are some BIG numbers, triple digits are always impressive. IgnitionOne says, "Google had a strong quarter, picking up 79.2% of spending, and beating back earlier gains from Yahoo!/Bing."

While mobile spending rocks on, total search spending grew at a pedestrian 7% over Q2 2012. But that number could pick up in the second-half of 2013 so says  IgnitionOne President Roger Barnette.

Perhaps, the uptick is starting already. According to Alexa.com, traffic to Google.com is up 24% in Q2 versus Q1, and Google Trends shows queries for people googling "Google" (can you believe that?) hitting all-time highs during Q2.  In fact, web searches for "Google" are up 45.31% for Q2 2013 versus Q2 2012. Last year, he company $10.12; so, Google Trends hint at a possible upside surprise, same goes for web traffic.

So far, all of the market research we have read and online checks warrant optimism for this week's profit report-card; however, iStock does have some concerns with what we saw in Q1's 10-Q.

Total costs and expenses rose faster than sales, 44.6% versus 31.23% (including Motorola Mobile 21.66% ex-Motorola). We'd be alright id the difference was a result of sales & marketing, and research and development, but those two investments actually increased at a slower pace than revenues at 24.98% and 27.48% respectively (ex-MOT, both outpaces sales growth).

Overall, traffic, Google Trends and IgnitionOne suggest that a strong quarter could be in the cards for Google Inc. (GOOG) and guidance could lift sentiment if Barnette is correct about the back-half of the year. Rein in rising costs and it could be enough to flirt with $1,000 by the end of the week.



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