Alphabet beats the street – and the industry
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Alphabet beats the street – and the industry

Tech-titan Alphabet – best known as ‘the company that used to be Google’, and inclusive of the newer, more streamlined, search and advertising business that bears that name – reported first quarter earnings at the end of last week. The company beat analysts’ expectations, posting earnings per share of $7.73 against consensus estimates of $7.24. It’s also spent the last 12 months battering its rivals: in the last year, shares of Alphabet have appreciated by 31.8%, whereas Zacks categorized Internet Services industry returned 17.1%. Following the release of these figures, Alphabet’s share price jumped 4.27% in after-hours trading.

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SOURCE: Yahoo Finance

Unsurprisingly, Google itself was the outperformer. Google-owned sites and partner sites grew 21.5% and 8.6%, respectively, from the year-ago quarter, bringing in 70% and 16% of total quarterly revenues. Meanwhile, the company’s ‘other bets’ segment (which includes some of the innovative stuff that Google-pre-Alphabet was best known for, like Nest and Calico) saw its revenue drop by 6.9% sequentially, but rise a reassuring 47.9% year-on-year.

Speaking to the future, Alphabet’s chief financial officer, Ruth Porat (who has been credited with bringing a business mind to the company), said:

“The strong performance in our advertising business allows us to take bigger bets within Google to fuel the growth of additional revenue streams, including those from Cloud, hardware, and YouTube subscription offerings. Cloud is one of our most important strategic priorities given the scale of opportunity in a rapidly evolving sector and the fact that the requirements for success align with many of our strengths. We will continue to invest here for the long-term opportunity. Similarly, hardware remains an exciting growth opportunity for us, and you've seen the early indicators again this quarter.”

Disclosure

Dominion holds Alphabet in its Global Trends managed Fund.


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