Can Google Earnings (Nasdaq: GOOG) Push Stock to $1,000 a Share?

Google earnings for the second quarter come out after the bell today - with most analysts expecting a strong quarter.

Google Inc. (Nasdaq: GOOG) is expected to report Q2 earnings of $10.78 per share on revenue of $14.45 billion. That compares with a $10.12 EPS profit on revenue of $9.61 billion in the same quarter a year ago, according to analysts polled by Reuters.

Google has become the tech darling among analysts disenchanted by Apple Inc. (Nasdaq: AAPL) and not at all impressed with Facebook Inc. (Nasdaq: FB).

In fact, Money Morning tech specialist Michael A. Robinson told Money Morning members on July 9 how Google stock is poised to gain roughly 50% by the end of 2015, after a stellar two-year run of 70% gains.

Monday, GOOG hit a high of $928. Shares are up 30% year-to-date, compared to the Standard & Poor's 500 Index gain of about 18%. Giddy investors are hoping Q2 numbers will be great enough to propel the stock over the $1,000 per share threshold.

However, even if investors don't get $1,000 a share, they just might get a stock split. Earlier this year, the Mountain View, CA-based company reached a legal settlement allowing it to split its stock for the first time ever.

A Surprise in Google Earnings?

While the Wall Street consensus is for Google to show a 4% decline in cost-per-clicks, in line with historical charts that show seven consecutive quarters of decreasing click prices, that figure is likely to come in higher-much higher.

Looking for Google to post better-than-expected numbers in this crucial segment are two "in-the-know" firms: The Search Agency, the largest independent paid search company in the U.S., and Adobe's digital marketing division, reports Venture Beat.

For the first time in two years, costs per click at Google are going up, not down, data from the two sources reveal.

Figures from The Search Agency show an 8.3% year-over-year increase and whopping 21.2 jump quarter-over-quarter. Adobe's numbers are a bit more modest with a 6% increase in the last quarter and a projected 5%-10% increase for the current quarter.

But the trend is the same - up.

Three Things to Look for in Google Earnings

With all the positivity surrounding Google, it's easy to overlook the details. Following are three things that will impact Google's present and future bottom-line.

  • Ad Revenue

Google continues to dominate the Internet and mobile ad market. In 2012, the Internet search giant collected $4.61 billion in mobile ad revenue worldwide, or more than half of the $8.8 billion mobile ad market. It also bagged nearly one-third of all digital ad spending, according to eMarketer.

This year, the company's share of global mobile ad spending is anticipated to grow from 52% to 56%, hitting $8.84 billion.

Google has been bringing in more revenue by holding on to its dominance of Internet search and online advertising, as well as through the distribution of its Android software.

While Google gives away Android to device makers, the operating system highlights Google's search engine and other services. This gives Google's other products such as Gmail, YouTube and Google Maps a prominent foothold in people's everyday lives even as they spend more time on mobile devices and less on PCs.

Powering more than 900 million devices worldwide, Android is the mobile market leader.

  • Google Glass

Enthusiasm for Google's new cutting-edge device, Google Glass, has also lifted shares.

Glass, worn on a user's head like a pair of eye-glasses, works similar to an Internet-connected computer. A small display screen is located above the right eye, and features information and imagery retrieved from the Internet. Video and pictures can also be taken hands-free.

Some 10,000 people paid $1,500 apiece for an early test version. So far, reviews have been favorable. Glass is expected to be released to the general public next year.

While consumers will be intrigued by the product, the major impact will be on commercial areas.

"Just think of how more efficient doctors and nurses could be if they had computers inside their glasses," Robinson told Money Morning members earlier this month. "Ditto for delivery personnel or for people working in logistics and supply chain management, from ports to remote rail terminals."

  • Motorola Mobility

About 14 months ago, Google purchased cellphone maker Motorola Mobility for $12.5 billion.

Since then, the acquisition has posted losses of nearly $1.4 billion. In attempts to stop the bleeding, Google has been reducing headcount and slashing costs at Motorola Mobility.

In the works is a new pipeline of phones, including a highly anticipated model dubbed Moto X.

Reports that the overall smartphone market has reached maturation and saturation has hurt rivals like Apple and Samsung. Motorola sold about 2.3 million smartphones in Q1 of 2013, a mere 1% of the global market, IDC data shows. But Google has high hopes for its new mobile phones.

The Wall Street Journal reports Google will spend upwards of $500 million to market the hugely-hyped Moto X. All four major U.S. carries are expected to make the device available to clamoring customers.

The phone, assembled in the U.S., retails for $199 with a wireless contract, or $599 or more without.

All these reasons for future profitability are part of why Robinson calls Google "The Only Tech Stock You'll Ever Need" - check out his full GOOG profile here...

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