Google Inc (NASDAQ:GOOG) is scheduled to report 2Q13 results July 18th. Analysts at Goldman are modeling consolidated revenue and non-GAAP EPS of $14.35bn and $10.36, versus consensus of $14.45bn and $10.79. The research firm is forecasting Google Inc (NASDAQ:GOOG) stand alone revenue of $13.32bn (+2% qoq and +16% yoy), in line with consensus. For Motorola Mobility Holdings Inc (NYSE:MMI), analysts are modeling $1.03bn versus consensus of $1.06bn. They are forecasting non-GAAP operating margins of 29.7% versus consensus of 30.0%.


Implications For Google

Analysts expect Google Inc (NASDAQ:GOOG) stand alone revenues roughly in line with consensus, as their checks indicate ad spend with Google came in largely on plan for the contacts. Given tempered Street expectations for Motorola Mobility Holdings Inc (NYSE:MMI), they view the potential downside risk in the unit as more muted this quarter. Product Listing Ads (PLAs) and mobile continued to drive incremental spend, with mobile at nearly 30% of clicks and more than 20% of spend.

Analysts at firm are modeling 21% yoy paid click growth, versus 20% yoy growth last quarter. They are modeling a 4% yoy decline in CPC’s, vs. a 4% yoy constant currency decline in 1Q13 (down 4% as reported). Based on their checks, Goldman analysts expect paid click and CPC growth roughly in line with our forecasts.

Google’s Valuation

All in they expect an in line quarter and for numbers to stay relatively unchanged post the print. As such, analysts remain on the sidelines. Over the next 12 months Goldman Sachs believe Google Inc (NASDAQ:GOOG)’s model will start showing changes in terms of profit margins related to its hardware build out that might surprise the market. That having been said, they would use a pullback related to this to get more constructive on the shares. Analysts’ 12 month price target for Google Inc (NASDAQ:GOOG) remains $965.

Key risks for Google

Material acceleration in search volumes, better-than-expected display and mobile growth, faster-than-expected cost growth, increasing competition.