What to expect from Alphabet’s Q4 earnings: Pay attention to those ‘other’ bets (GOOG, GOOGL)

Google’s parent company Alphabet will announce its fourth quarter earnings on Thursday afternoon.

Here’s what you need to know, starting with Wall Street’s expectations, according to analyst estimates compiled by Yahoo Finance:

Revenue: $25.2 billion, up 18% year-on-year.

EPS (adjusted): $9.67

Besides the numbers, here’s what else you should be looking for in Alphabet’s earnings report:

Hardware

Last quarter’s results will represent the first time Google significantly ramped up its hardware efforts. Its first-ever phone, the Google Pixel, launched to universally positive reviews, but has struggled to meet demand. Google also released Google Home, a capable Amazon Echo competitor, and Daydream View, a virtual reality headset for the Pixel and a small number of other Android phones.

That was just the first step in Google’s ambition to become a hardware company and to bring order to the fragmented world of mobile devices using different versions of its Android software. It’s very similar to Microsoft’s Surface program.

Google does not break out sales figures for its hardware business (hardware revenue is lumped into the “Other Revenues” line item, which includes everything from app store sales to corporate cloud business contributions). But as the hardware effort starts to gain momentum, Google may provide more details about the sales of its growing catalog of devices.

The Google Pixel.Hollis Johnson/Business Insider

Other bets

This is the big story at Alphabet.

Outside of the core Google business are Alphabet’s “Other Bets,” the separate companies exploring ambitious new businesses, from self-driving cars to drones. There has been a lot of turmoil throughout the Other Bets companies in recent months as Alphabet shutters or rejiggers some of the projects and attempts to keep costs in line.

Alphabet’s Other Bets reported $197 million in revenue and an operating loss of $840 million during the third quarter last year.

Investors will be looking for signs of progress in some of these businesses, as well as an update from Alphabet on its commitment and broader strategy for these Other Bets in the wake of the all the recent changes.

To recap:

Google Fiber’s CEO stepped down and the company has ended its expansion plans to provide high-speed internet to new cities. There has even been speculation that Alphabet might try to sell its Google Fiber business to a traditional internet service provider.

The head of Project Wing, the drone delivery effort from Alphabet’s X “moonshot” division, also stepped down. Later, some members of Project Wing were either laid off or moved to other projects.

A Titan Aerospace drone.Titan Aerospace

We also learned that X canceled Titan, the solar-powered internet-beaming drone, some time last year. Some Titan staffers are now working on Project Loon, the X project that wants to use high-altitude balloons to beam high-speed internet to earth.

Finally, Alphabet is said to be exploring a sale of Skybox, a satellite imaging company it bought about three years ago for $500 million, according to Bloomberg.

Alphabet has lost several other top executives from its other bets companies over the last year.

But it wasn’t all bad news. In December, Alphabet’s self-driving car project spun out of X into its own company called Waymo. Waymo’s goal is to partner with car companies and provide them with the technology needed for self-driving cars. It already has a deal with Chrysler.

Do you know anything else about what’s happening with Alphabet’s other bets? Email skovach@businessinsider.com.

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