Alphabet to give first peek at cost of 'moonshot' bets

Mon Feb 1, 2016 6:13am EST
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By Anya George Tharakan and Supantha Mukherjee

(Reuters) - How much is Google-parent Alphabet Inc (GOOGL.O: Quote) spending on "moonshots" – self-driving cars, glucose-monitoring contact lenses, Internet balloons and other ambitious projects?

Investors will get their long-awaited answer when Alphabet reports fourth-quarter results after markets close on Monday.

The report will be the first time Alphabet will break out results for what it calls "Other Bets," which includes Google Fiber; smart home accessory maker Nest Labs and the secretive "X", home to the self-driving cars project.

The results will also show how successful Google was in targeting ads at a fast-growing number of mobile users, especially after Facebook Inc's (FB.O: Quote) stellar report.

A strong report could boost the stock enough for Alphabet to surpass Apple Inc (AAPL.O: Quote) as the most valuable company in the world.

"For the first time they (Alphabet) have a real catalyst to the stock, aside from a standard beat-and-raise," said James Cakmak, an analyst at Monness, Crespi, Hardt & Co Inc.

The market has wanted four things from Alphabet: consistent revenue growth, margin stabilization, greater disclosure and share buybacks, and they will get all of them this quarter, RBC Capital Markets analyst Mark Mahaney said.

The reading may not be pretty.   Continued...

A Google employee on a bicycle acts as a real-life obstacle for a Google self-driving prototype car to react to during a media preview of Google's prototype autonomous vehicles in Mountain View, California September 29, 2015.  REUTERS/Elijah Nouvelage