Analysts say Google’s ads are strong, but spending is too high. Getty Images Analysts are worried Google may be spending too much.Google Inc. is set to report third-quarter earnings after the market closes Thursday. While analysts are bullish on its ad growth, they are concerned that Google’s recent spending spree could have a long-term effect on margins. The Mountain View, Calif.-based tech giant topped analyst expectations last quarter after posting stronger ad revenues, particularly in mobile. Analysts are anticipating growth in both sales and total revenue for the current quarter. However, Cantor Fitzgerald analyst Youssef Squali and other analysts have recently expressed concern over Google’s margins amid increased spending. Squali even called margin deterioration a “long-term concern” for the company in a recent note to clients. “Google’s opex spending growth remains an enigma,” Susquehanna Financial Group analyst Brian Nowak said in a recent note. That aside, an overwhelming majority of the 46 analysts polled by FactSet have a buy rating on Google GOOGL,-2.74% Here’s what to expect: Earnings: Analysts polled by FactSet are projecting adjusted earnings per share of $6.55 for the September quarter, which would mark a 7.8% quarter-over-quarter improvement and a 22% jump from the same period in 2013. Revenue: The consensus is calling for total revenue of $16.6 billion, which would mark a slight decline from $15.9 billion last quarter but an 11.4% improvement from a year ago. Analysts expect that growth to be led by strength in search and display ads, particularly in the U.S. “Our latest industry conversations indicate Google ad budget growth remains strong,” Nowak said. Stock reaction: Shares of Google are down 1% since January, underperforming the S&P 500, which is up 3.1% year-to-date. On Friday, shares of Google closed down 2.75% to $555.19, mirroring a selloff in the broader U.S. equity markets. What to watch for: Google may soon launch a new phone under the Nexus brand that is even bigger than the iPhone 6 Plus released by rival Apple Inc. in September, according to a report this week by The Wall Street Journal. This would propel Google into the phablets market, underscoring yet again the shifting market for mobile devices, where the phablet—a device that is smaller than a tablet but larger a traditional smartphone—is becoming increasingly Source