Alphabet’s earnings release
Alphabet (GOOGL), the parent company of Google (GOOG), is scheduled to announce the third quarter earnings of 2015 on October 22. This would be the first quarter for Alphabet after the restructuring of the firm.
The technology titan is expected to woo its investors once again after its performance in 2Q15. According to the consensus analyst estimate, Alphabet is expected to report earnings of ~$7.2 per share on revenue of ~$18.5 billion. This translates to a rise of 76.3% year-over-year (or YoY) in earnings per share (or EPS), and a rise of 10.8% YoY in revenue. The estimated range on EPS is from $6.13 to $8.09 per share, and from ~$18.2 billion to ~$19.5 billion for revenue.
Currency headwinds and the large-cap sector in 2Q15
Google’s revenues grew at a year-over-year rate of 11% in 2Q15. As the chart above shows, the company’s revenue growth rate slowed over the past few quarters. However, the strong US dollar (UUP) played an important role in this slowdown. For example, currency headwinds shaved off 7% from Google’s revenue growth rate in 2Q15, and 5% in 1Q15. Despite the hedging program, the impact of strong currency on Google’s revenues was $1.1 billion in 2Q15.
There is a lot of action happening this week owing to the release of third quarter earnings of various technology titans. Besides Alphabet, IBM (IBM) announced its earnings on October 19, eBay (EBAY) announces its earnings on October 21, while both Alphabet and Amazon (AMZN) will announce their 3Q15 earnings on October 22.