Google revenue

Alphabet Stock falls on disappointing Google earnings

Alphabet Inc. shares fell more than 7% today in after-hours trading after Google’s parent company missed Wall Street’s first-quarter earnings targets amid a slowing global economy. growth in online ad sales, and its profits took a $1.7 billion hit from another fine from the European Commission.

Overall results for the quarter ended March 31 were driven by continued strength in mobile search, along with strong contributions from YouTube, followed by Google Cloud‘s cloud computing business, Chief Financial Officer Ruth said. Porat during the earnings call, which took place after the close of trading. .

Alphabet posted quarterly revenue of $36.34 billion, up 17% from $31.15 billion in the same quarter of 2018. Its net profit rose to $6.65 billion or $9.50 in diluted earnings per share (EPS), down from $9.4 billion, or $13.33 in EPS, earned in the year-ago quarter.

“There was a significant year-over-year variation in the impact of currency fluctuations on our results this quarter, going from a tailwind in the first quarter of 2018 to a headwind in 2019,” said declared Porat. “These affect both revenue and operating profit, given that the majority of our expenses are in the United States. Based on the continued strengthening of the US dollar against major currencies, we expect to continue to (face) our revenue and operating profit again in the second quarter.

Google’s advertising revenue increased 15.3% to $30.72 billion from the year-ago quarter, when higher growth was 24.4%, as Google continues to face lower advertising prices.

“The timing of product changes in ads can sometimes impact year-over-year growth rates,” Porat said. “We will continue to make changes with a focus on the long-term benefit of users and advertisers.”

Analysts had expected ad revenue of $31.48. billion

“The biggest factor affecting both (costs per click) and click trends are YouTube engagement ads, with YouTube clicks accounting for the vast majority of total clicks,” Porat said. “While YouTube clicks continued to grow at a substantial rate in the first quarter, YouTube’s click growth rate slowed from what was a strong first quarter last year, reflecting the changes we have made in early 2018, which we believe are overall additive to the user and advertiser experience.

Alphabet’s results were below Wall Street expectations for revenue of $37.36 billion and diluted EPS of $9.91. Excluding the European Commission fine, Alphabet’s diluted EPS of $11.90 exceeded analysts’ consensus estimate of $10.16.

Alphabet stock, which ended up 1.47% at $1,296.20 per share at market close, fell more than 7% in after-hours trading at $1,200.70 as of 7:15 p.m. EST .

The company continued its practice of not allocating a separate line item to revenue from its Google Cloud business, which encompasses Google Cloud Platform (GCP) and its G Suite collaboration and productivity tools, including Gmail, Hangouts, Calendar, Google+ and docs. Instead, cloud revenue is lumped into Google’s “other” revenue category, which also includes hardware (including Nest) and Google Play. “Other” revenue soared to $5.45 billion in the first quarter, a 25% increase from $4.35 billion in the first quarter of last year, when it jumped 36% , powered by Google Cloud and Google Play and partially compensated by hardware. Sales. Analysts had expected this year’s figure to reach $5.67 billion.

“Google Cloud Platform remains one of Alphabet’s fastest growing businesses, with strong customer momentum which is particularly reflected in demand for our compute and data analytics products,” Porat said. . “Play’s strong growth was particularly driven by performance in (Asia-Pacific). Hardware results reflected lower Pixel sales year-over-year, reflecting, in part, strong promotional activity at industry-wide given some of the recent pressures in the high-end smartphone market.

“We are pleased with the momentum of Google Cloud Platform, with balanced growth in new customers and expansion within existing customers driving revenue growth,” Porat said.

New Google Cloud CEO Thomas Kurian pledged in February to significantly increase investment in Google Cloud #3’s sales organization and channel partner ecosystem to accelerate growth and better compete Amazon Web Services and Microsoft Azure, the #1 and #2 cloud providers, respectively. At Google Next ’19 in San Francisco earlier this month, Kurian announced Google Cloud’s push for enterprise customers.

“Thomas has really taken off,” said Google Chief Executive Sundar Pichai. “We’re also deeply committed to becoming the most customer-centric cloud provider for enterprise customers and making it easier for enterprises to do business with us, through new contracts, pricing, and more.”

“We’re really accelerating, and ramping up time to market both internally and through our channel partners has been a priority,” Pichai said. “We’re building a strong business across all of our verticals, and we’re certainly seeing strong momentum.”

Alphabet increased its workforce to 103,459 from 98,771 in the fourth quarter.

“Consistent with previous quarters, the majority of new hires were engineers and product managers,” Porat said. “In terms of product areas, the biggest headcount increases have been in the cloud for technical and business roles.”

Alphabet’s revenue was hit by the $1.7 billion European antitrust fine imposed in March. Alphabet, based in Mountain View, Calif., had previously warned that its operating profit, net profit and EPS would be impacted by the burden of the 1.5 billion euro fine imposed by the European Commission, which judged that certain contractual provisions of Google AdSense with third parties third-party websites using the Google search bar amounted to anti-competitive restrictions.