Google Inc (NASDAQ:GOOG) will report its Q4 earnings result on Tuesday, January 22nd. Analysts expect Google to report in-line  Q4 results, capping what has been a successful year for both Search and Display advertising for the company.

Google Earnings

Analysts from Cantor Fitzgerald give Google Inc (NASDAQ:GOOG) stock a ‘BUY’ rating. Research firm’s ‘Buy’ rating reflects prospects for continued teens growth in Search advertising and materially faster growth in Display, which is peg at 30% growth or better.

Valuation is still reasonable with the stock trading at 9.2x EV/EBITDA and 16.9x P/E on FY 2013 estimates.

Analysts’ 4Q 2012 consolidated net revenue and EBITDA estimates are $11,741.6M and $4,936.2M (42.0% margin,) slightly below the Street’s average of $12,395.6M and $5,087.0M (41.0% margin). It’s important to note the wide range of Street estimates ($11.3B 13.2B for revenues). The disparity between analysts estimates and Street consensus is due to lower Licensing and Motorola revenues.

Analysts’ Google Sites and Networks revenues are in-line with Street consensus. However their EPS estimate is $10.01 vs. consensus of $10.61 (range of $8.78-11.91.)

Google Inc (NASDAQ:GOOG)’s share of U.S. Search remained above 66% throughout 4Q 2012, with Search query growth outperforming the overall industry rate (at -2% vs. -4% overall, according to comScore). It’s important to note that this data does not capture mobile or international, where most of the query growth happens. Analysts estimate Google’s paid clicks at +27% Y/Y and CPCs at -9% Y/Y (consensus is at +28% and -7.5%, respectively).

According to analysts’ proprietary channel checks PLAs, once free and popular, are now fee-based and very popular, particularly within Retail (one of Google’s largest verticals). PLAs, which seem to be more additive to adwords than cannibalistic, enjoy higher conversion rates, higher CPCs, and therefore could drive incremental spend on Google in 4Q 2012 and FY 2013.

Analysts estimate that gross Display revenues increased nearly 40% to $1.8B in 4Q 2012, or roughly 12% of revenues (~$7B annualized) as Google’s YouTube, AdEx, and Mobile solutions continue to take share.

Analysts believe that the 1.6% Q/Q decline in USD vs. a currency basket should result in a revenue gain of ~$100M in 4Q and a positive impact of ~$0.12 to EPS. That said, Google Inc (NASDAQ:GOOG)’s hedging program may offset some/all of this impact.

In October 2012, Google Inc (NASDAQ:GOOG) shocked Wall Street as the company’s Q3 “consolidated earnings” leaked earlier and were below analysts’ expectations.