Alphabet to report Q3 earnings after the bell

Google parent Alphabet is set to report its third-quarter earnings Tuesday after the market closes.

Here is what analysts are expecting, according to average estimates compiled by LSEG:

• Earnings per share: $1.85
• Revenue: $86.30 billion

Wall Street is also watching several other numbers in the report:

• YouTube advertising revenue: $8.89 billion, according to StreetAccount
• Google Cloud revenue: $10.88 billion, according to StreetAccount
• Traffic acquisition costs (TAC): $13.53 billion, according to StreetAccount

Alphabet’s third quarter was filled with shake-ups externally and internally, including at its most senior ranks and its most important business.

Earlier this month, the company replaced Prabhakar Raghavan, the company’s search and ads boss since 2018, with Nick Fox, a longtime executive known for his role in Google’s Assistant unit. Additionally, the team working on the Gemini app, which includes the company’s artificial intelligence direct-to-consumer products, will join Google DeepMind under head Demis Hassabis.

The moves came as Google continues to restructure its teams to move more quickly in the AI arms race, where it faces increased competition from entrants such as OpenAI’s ChatGPT.

During the quarter, the company also faced the advancement of several antitrust lawsuits related to its search and ads business. In August, the company faced a guilty verdict from a federal U.S. judge who ruled that Google has illegally held a monopoly in search, marking the first antimonopoly decision against a tech company in decades.

In early October, the DOJ made recommendations for Google’s search engine business practices, indicating that it was considering a possible breakup of the tech giant as an antitrust remedy, specifically in regard to forcing the company to make “structural” changes to Chrome, Android and Google Play app store businesses.

Additionally, the DOJ suggested limiting or prohibiting default agreements and “other revenue-sharing arrangements related to search and search-related products.” That would include Google’s search position agreements with Apple’s iPhone as well as Samsung devices. Those are deals that cost the company billions of dollars a year in payouts but position Google as the default search engine in those products.

With the slow-moving legal process, the company is still likely years away from being forced to make any changes to businesses.

In a separate antitrust case in early October, a U.S. judge issued a permanent injunction that will force the company to offer alternatives to its Google Play store for downloading apps on Android phones. However, the judge has since granted Google a pause on the injunction.

Google was back in court in September facing off for a second time against federal prosecutors, this time for the DOJ’s antitrust trial against Google’s ad tech business. The trial’s closing arguments will take place Nov. 25.

Outside of courthouses, Google also made some product announcements during the quarter.

In August, the company announced its new Android software update and its latest line of Pixel smartphones that utilize Google’s Gemini AI assistant. The company does not make a lot of money from its hardware business, but the latest Android features could help Google drive new revenue through its Gemini AI subscription program.