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Alphabet Changes Reporting Segments Prior to Q4 Earnings

Investors are waiting for Feb 1 as Alphabet Inc.GOOGL is going to report fourth-quarter results.

Prior to the announcement, Alphabet declared that it will report the financial results under a new format, especially the segmental performance.

More on the New Format

Alphabet will report the financial results under two segments - Google and other businesses.

The Google segment will include the results of its main Internet and related businesses like Search, Ads, Commerce, Apps, YouTube, Cloud, Android, Chrome and Google Play. Hardware products like Chromecast, Chromebooks, Nexus and its virtual reality offerings will also be reported under this segment.

Coming to its other segment - Other Bets will incorporate Alphabet's other businesses such as Access/Google Fiber, Next, Calico, Verily, Google Capital and X.

For both the segments, the company will report revenues, segment operating income / (loss), excluding stock-based compensation expense, stock-based compensation, segment operating income / (loss), capital expenditures and depreciation, amortization and impairments.

Alphabet also plans to provide historical segment information for all the quarters of 2015, the fourth quarter of 2014 and full years 2013, 2014 and 2015 in the upcoming earnings release.

The search giant also said that there would be no alteration to its consolidated reporting; however, there will be some changes in the revenue breakout.

Conclusion

Ever since Alphabet completed the restructuring in October, it has been working toward making essential internal changes to ensure transparency in its financial results for shareholders.

Per Alphabet Chief Accountant Amie Thuener, the public holding company's structure is expected to "bring increased focus, accountability and transparency…"

Alphabet currently carries a Zacks Rank #2 (Buy).

Investors may consider stocks such as Mercadolibre, Inc. MELI , Travelport Worldwide Inc. TVPT and Groupon, Inc. GRPN . While Mercadolibre sports a Zacks Rank #1 (Strong Buy), Travelport and Groupon have the same Zacks Rank as Alphabet.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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