GOOGL is reporting their Q3 Earnings on 10/16/2014 after the market close. Consensus estimates indicate that GOOGL will earn $6.53 a share, a 22% increase (Year over Year). On the revenue side, analysts expect sales to rise to $16.6 billion, an 11% increase (Year over Year).


Focus Points

The main focus of Google’s earnings announcement will be its growth in ad revenue, particularly within mobile. Included in the ad revenue, analysts will look at cost per click (CPC) and the Paid Click Growth. Paid Click Growth is the number of users that clicked on ads to generate revenue.


Analysts have some major concerns regarding Google’s margins amid their increase in spending. This could shape up to be a potential long term concern for the company.


Recently, Google unveiled their three Nexus-branded devices with a higher price tag in direct competition with Apple’s devices, according to the Wall Street Journal. More specific details should be available during the call.


Technical Picture


GOOGL has been a relative underperformer for a period of time now. GOOGL was unable to make any progress after breaking out of a cup with handle back in July.  While the Nasdaq was making new highs, the stock was unable to rise above its 52 week high, 614.44, a key divergence. GOOGL has since fallen below its 50 and 200 day moving average lines, key support areas. GOOGL has not been below its 200 day moving average line since June 2012. 


Best Returns,

The MarketSmith Team