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Incomes Outlook: Google income isn't as badly affected by Apple adjustments that dumped Snap, however Alphabet has its personal considerations

The same factors that torpedoed Snap Inc.'s earnings results remain threatening as investors wait for parent company Google Alphabet Inc.'s financial results on Tuesday.

Google
Google,
-3.04%

Goog,
-2.91%
could be hindered by a change in Apple Inc.
AAPL,
-0.53%
Privacy policy that has made it harder to target and measure digital advertising, as well as a stifled global supply chain that has reduced advertising spend. Google is probably not as exposed as Snap
SNAP,
-26.59%
because, according to Wall Street analysts, Google has invested heavily in developing aggregated measurement approaches to prepare for data protection changes.

"Given Snap's size, maturity, and ad technology compared to the much larger, more experienced industry leaders, we believe the company is more prone to these challenges," wrote Brian J. White of Monness, Crespi, Hardt & Co. of privacy issues and concerns Disruptions in the supply chain. "However, we doubt that any company tied to digital ad spend will be immune to these issues, including Facebook, Alphabet, and others."

For more: Snap points to the possibility that Apple caused the long-dreaded "Ad-Mageddon"

Google's main problem continues to be antitrust scrutiny in both the US and overseas, which resulted in the company cutting its app fees in half on Thursday – a nod to the saber-rattling of developers, regulators, and lawmakers around the digital store from Google more accessible and the commission fees less punishable.

A bipartisan bill in the U.S. Senate, the Open App Markets Act, would force corporate app stores to allow developers to use other payment systems, which could potentially help them opt out of standard service fees. The bill, announced in August, followed an antitrust lawsuit filed by attorneys general in 36 states and the District of Columbia alleging Google abused its power over app developers through its Play Store on Android.

“We believe Alphabet is well positioned for a further rebound in digital advertising spending and further momentum in the cloud. However, we assume that the antitrust investigations will continue with a great deal of noise, ”warned Monness Crespi Hardt analyst White.

What to Expect

Merits: Analysts, on average, expect Google to post earnings of $ 23.73 per share, down from $ 16.40 per share a year ago. Analysts forecast USD 20.05 per share at the end of June.

Contributors to Estimize – a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, corporate executives, academics, and others – are equally bullish, forecasting average earnings of $ 23.73 per share.

Revenue: Analysts expect Google to post $ 52.31 billion in revenue excluding traffic acquisition costs (TAC) in the third quarter, compared to $ 38 billion a year ago, excluding TAC. It is estimated that contributors forecast an average of $ 52.06 billion.

Stock movement: Google stock is up 56% so far this year, while the S&P 500 index
SPX,
-0.11%
has increased by 21%.

What analysts are saying

Google's risk is further mitigated by a diverse revenue model that includes a multi-billion dollar cloud business and other bets. “Google Cloud offers a unique one
Value proposition for businesses as their robust cloud offering brings consumer-driven innovations (e.g., Google Maps, Google Assistant, Google Play, YouTube, Google Shopping, etc.) to buy Google stock with a target price of $ 3,500.

Cowen's John Blackledge remains "up" given the robust strength of Google's powerful search business amid an uncertain online advertising marketplace. "We expect robust vacation spending despite inventory issues," Blackledge said in a October 11 release, maintaining an outperformance valuation for Alphabet shares and a price target of $ 3,300.

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