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Outlook for Google Earnings

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  • Description

    Morningstar senior equity analyst Rick Summer previews Google's earnings.

  • Duration 2:48
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Google reports earnings -- after the -- Google missed estimates last -- -- could happen again.

Rick summer is -- morning starts yeah.

Equity analyst Rick thanks so much for joining us that was a bit surprised last quarter do you think it could happen again.

Yelled -- always -- -- make -- quarter to quarter I don't think a lot of analysts have necessarily visibility in that quarter to quarter movement.

And certainly the company doesn't provide you a lot.

You know we're looking for some stability here -- -- -- -- a little bit more predictability we look at.

Search spending a little bit more stable on I think that a lot of the current challenges and play the company last quarter may not materialize this quarter.

Larry Page has been in the driver's seat for a year now do you think is giving the job done.

-- wait we're big fans a Larry Page and that he's definitely getting the job done I think where he.

Pails in comparison perhaps Eric Schmidt as I think that he's not as familiar and not as.

Not as wrapped up in and certainly the investment community I think in terms of leading the company being -- moral authority and actually making big bats which was is what he's promised to do.

-- is doing a fine job there what his biggest achievement so far.

Yes so we look at what was really gone on and and that having to -- a lot of very challenging things you know number one is is written the regulatory environment never -- the intellectual property environment.

Certainly know that shot across the -- only saw that big acquisition for Motorola mobility.

Quite frankly we've seen a lot of stability.

Debt the arms race and if you will it doesn't seem that girl's losing that as actively as a result of that big Motorola acquisition.

We're still not big fans of -- that handset market for say.

But we look at the -- in this continue strengthening handwriting we really think that's one of the big keys.

To put Google success going forward here we do buy this stock ahead of earnings.

So that we -- earnings is big catalyst from our perspective we still look at this is trading -- about that 630 range we think it's worth about 780.

We actually like a little bigger discount to fair value before we start pounding the table -- -- but it's still pretty safe -- for our clients here at this point they have 44 point six billion in cash what do you think their plans are that.

So I think right now we have a few things one we see we're still seeing heavy investment they've been hiring a lot first certainly over the course -- 111.

Certainly the investment and and the investor -- motor road but we're Motorola building will need to happen.

We're seeing continues substances -- -- products like Google play.

A lot of things around and -- in the same time.

Lastly.

That cash balance is really a big defensive moves referred to is really ward competitors offer the same point.

Eventually capital allocation returning cash to shareholders.

Does become an issue -- And an interesting all right Rick summer thanks for getting us ready for earnings we appreciate it.

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