Google needs 6% growth in sales?

Oct. 15 (Bloomberg) -- Google Inc., reporting third-quarter earnings after markets close, needs to post sequential sales growth of at least 6 percent to meet traders’ “whisper number” and send the stock higher, an analyst said.

=> 6%? Should have no problem!! Given 50% of the business from international and USD$ down by 5% to 15% vs other currencies. That will generate additional 5% increase in sales (50% x (5%+10%)/2). It is kind of expected and has to be at least 6%.

Investors are looking for revenue, excluding sales passed on to partner sites, to rise to about $4.3 billion from $4.07 billion in the previous three months, according to Aaron Kessler, a San Francisco-based analyst at Kaufman Brothers LP. Analysts in a Bloomberg survey estimate revenue of $4.25 billion.

“Upside’s getting priced in,” Kessler said in an interview. “At least we know where the bottom was and we’re kind of out of the bottom here.”

Google, which grappled with a slowdown in online advertising sales during the recession, is now seeing a more “normalized” level of spending by clients, Kessler said. Chief Executive Officer Eric Schmidt said earlier this month that the “worst is behind us.” Analysts have raised their estimate for Google’s third-quarter sales by $45.2 million in the past four weeks.

Clayton Moran, an analyst with Benchmark Co. in Boca Raton, Florida, said investors are looking for $4.2 billion to $4.3 billion in sales for the third quarter. Google may need to report $4.4 billion to $4.5 billion to get the company’s stock “to really continue to move higher,” he said in an interview on Bloomberg Television.

Analysts predict Google will report earnings, excluding stock-based compensation, of $5.43 a share, according to the Bloomberg survey.

Google, based in Mountain View, California, fell $3.58 to $531.74 at 12:32 p.m. New York time in Nasdaq Stock Market trading. The shares had climbed 74 percent this year before today.
To contact the reporter on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net