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Investors have a lot to look for when Google Inc. (NASDAQ: GOOG) reports earnings after the bell today (Thursday). The company needs to prove it has plans to stay in the lead among tech companies - and fight off the encroaching threat of social media giant Facebook Inc.
Investors are hoping Google avoids a repeat of last quarter's report.
Mountain View, CA-based Google reported a rare earnings miss in January, sending the stock tumbling some 8%. Google's stock price has rebounded since, recouping nearly all of the loss, and currently sits just 5.5% below its 52-week high.
Analysts expect first quarter sales to rise nearly 25%, and that earnings per share will rise 20% to $9.65, CNN Money reports. For the full year, industry gurus forecast growth of 22% and a pleasing 18% profit increase.
A lot is riding on Google's first-quarter earnings results, not just for the company, but also for the overall market. Gangs of Google fans hope the favored company will follow bellwether Alcoa Inc.'s (NYSE: AA) lead and report better-than-expected numbers.
Following the release, ears will be pressed to hear what CEO Larry Page has to say on a number of key issues. Here's what investors should watch for.
What to Look for from Google
Number one on many investors' minds is how Google plans to hold off the competition from Mark Zuckerberg and Facebook.
On Wednesday, Google addressed that issue in part when it announced a new and improved Google+ which will give social networkers a true custom experience on the Website. Part of the customization will apply to apps and the navigation bar that will incorporate profiles and pictures efficiently.
Google in addition just announced the unveiling of the Explore page, which will highlight the newest and top-trending posts within Google+. Forbes called the redesign "aesthetically awesome."
Since its debut in 2011, Google+ has amassed more than 170 million users and is taking share from Facebook.
Another concern many shareholders have is what Google plans to do with its Aug. 15 purchase of Motorola Mobility Holdings Inc. (NYSE: MMI), and how the proposed acquisition fits into Google's strategy. The deal has not closed, but it's clear what Google really wants out of the deal is the company's patents, not its hardware.
The Wall Street Journal reported Wednesday that the rumor mill is buzzing in Asia about Google possibly offering to sell Motorola's mobile device business to Chinese tech giant Huawei.
One of the biggest areas investors want Google to address is how it plans to remain ahead in tech products to maintain its "cool" reputation.
Google Project Glass
Forget looking through "rose colored" glasses. Google hopes it has something even rosier with its augmented reality eyewear concept dubbed Project Glass.
The company's new prototype glasses allow the user to text, send e-mail, listen to music and do other mobile activities, all beamed directly at the wearer's field of vision. And it's all hands- free - Google Project Glass is a voice-activated device.
Google noted the stealth project is still in the making and is nowhere near completion, but it demonstrates the company's efforts to stay on the cutting edge of tech.
"This is amazing breakthrough technology, something that both consumers and investors should be extremely excited about," said Money Morning Defense and Technology Specialist Michael A. Robinson. "It puts high-tech developments usually reserved for the military in the hands of consumers. It's just one of the latest inventions from big-cap names like Google that will help define the next era in technology."
The good news should govern Google's earnings as the storied company continues to grow by leaps and bounds and be a leader in innovation.
Google is by no means a struggling or troubled company, but its charisma has been overshadowed lately by the likes of Facebook and Apple. Products like Google Project Glass should boost the company's reputation for bringing hot new trends to market - as Apple has done with the iPad and iPhone.
Google (NASDAQ: GOOG) Shares Struggle
Google has not participated in the first quarter rally that took the Nasdaq up nearly 19%. Its stock is down 1% for the year.
Among tech fans and investors, Apple remains a favorite. Apple, whose market value momentarily surpassed the $600 billion milestone Tuesday, has seen its shares gain 55% to date in 2012.
Now that Apple has announced a dividend, investors may demand to know what Google plans to do with its own substantial $44.6 billion cash pile. Might the company announce that it plans to share its wealth as well and reward shareholders with a dividend?
Google shares are valued at just 15 times the coming year's earnings estimates. That value is about the same as the broader markets, but Google's profits are growing at a much faster rate than the S&P 500.
GOOG was trading up 1.38% at $644.76 just before noon.
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