Google Stock: YouTube Expected To Be Drag On Google Earnings

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Once Google becomes a parent, YouTube is likely to become a weak spot again alphabet (Google) will report fourth-quarter earnings on Thursday, analysts say. Slowing ad revenue growth on YouTube is a problem for Google stock, but the subscription side of the business remains opaque for investors.


YouTube’s ad revenue fell for the first time when Alphabet reported Google’s earnings for the September quarter. YouTube ad revenue fell 2% to his $7.07 billion, below estimates of $7.5 billion.

Google began separately reporting some of YouTube’s financial metrics in the fourth quarter of 2019. For this December quarter, analysts estimated his YouTube revenue at $8.2 billion, down nearly 5%.

The company faces tough year-over-year comparisons as YouTube’s revenue surged during the coronavirus emergency, according to some Google stock analysts. But other factors are also at work.

YouTube’ is unilaterally squeezed by consumer data restrictions appleof (AAPL) Privacy changes Meanwhile, there is increasing competition from streaming and short video platforms,” ​​said Insider Intelligence analyst Evelyn Mitchell in a preview of Google’s earnings.

Google Stock: TikTok Slowdown

Google is Growth of TikTok It has its own short video platform. How much revenue Google will generate from YouTube shorts is his key question in 2023, according to the analyst.

Raymond James analyst Aaron Kessler predicts a 5% drop in ad revenue on YouTube.

“We expect continued headwinds in both brand and direct response advertising in the fourth quarter, with direct response being partially impacted by ad privacy headwinds,” he said in a note to clients. “In 2023, we model 4% revenue growth, and in the second half we expect him to recover to high single digits.”

Google’s equity analyst estimates YouTube’s ad revenue growth in 2023 at 6%.

Google does not categorize revenue on the subscription side of YouTube’s business. Additionally, Google sells subscriptions to YouTube TV, a cable TV-like streaming service. Google also sells subscriptions to music services.

Google does not report operating profit for YouTube as a whole. Its profitability remains a mystery.

Google and NFL streaming rights

Google beats out Apple by winning the rights to stream NFL Sunday Ticket games on its YouTube TV service. YouTube plans to pay over $2 billion annually for rights.

According to Bank of America’s report on Google stock, “cash flow concerns have risen following YouTube’s recent announcement of a $2 billion, seven-year deal for the NFL Sunday Ticket starting in 2023.”

The CFRA report states:

As for Google’s earnings, analysts estimate fourth-quarter earnings of $1.18 per share, down 22% from the year-ago quarter. Earnings he is expected to grow 1.6% to $76.5 billion.

Alphabet recently announced it would cut 6% of its global workforce to protect its profit margins. Google stock is up 12% in 2023. Shares fell 2.5% to close at 96.94 on Monday.

Follow Reinhard Krause on Twitter @reinhardtk_tech See the latest in 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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