Oppenheimer analyst boosts Google estimates saying checks suggest better cost-per-click rates

Ahead of the Bell: Analyst boosts Google estimate

NEW YORK — An Oppenheimer analyst on Friday raised his first-quarter and full-year estimates for Google Inc. above average Wall Street expectations because he expects the online search leader to reap higher ad revenue in the U.S.

Jason Helfstein said his research suggests better-than expected year-over-year cost-per-click rates for Google. Cost-per-click is the amount that advertisers pay Google for each click on their ad.

“Additionally, third-party data supports improving U.S. paid click volumes,” the analyst wrote in a note to investors. He raised is U.S. revenue estimate for the quarter and the year but left his international revenue estimates unchanged.

Helfstein expects Google to post a first-quarter adjusted profit of $6.57 per share, up from his earlier estimate of $6.40 per share. He is forecasting sales of $4.94 billion, up from $4.82 billion.

Analysts surveyed by Thomson Reuters expect, on average, profit of $6.53 per share on sales of $4.92 billion.

For the full year, Helfstein now expects adjusted earnings of $27.97 per share, up from $27.50 per share. He’s expecting sales of $21.59 billion, up from $21.27 billion.

Analysts expect earnings of $27.38 per share on sales of $20.79 billion.

“Search advertising remains the most effective advertising medium that exists today, based on the paid-click advertising model,” the analyst writes. “With roughly 70 (percent) market share, Google is by far the U.S. leader.”

Helfstein rates Google “Outperform,” also raised his target price to $715 from $700.