Alphabet beats on earnings report, brings in $27.77 billion
Alphabet, the parent company of search engine giant Google, reported third quarter earnings at the end of last week – and investors liked what they saw. The company logged some big beats against Wall Street’s expectations, demonstrating that they can still stay on top, despite a slew of recent problems such as dodgy Russian adverts, fake news, and rumblings and penalties from the EU’s anti-trust authorities.
Alphabet’s share price climbed fast on the back of earnings
SOURCE: Yahoo Finance
As always, Google was the biggest draw in Alphabet’s earnings. Executives pointed to strengths in the segment’s online advertising business around the world, and said that new initiatives like Google Home and cloud computing were paying off. CEO Sundar Pichai said: “you’re clearly entering an era where you’re going to have different types of computing experiences, so to do that and to stitch it altogether across, I think it’s important that we thoughtfully put our opinion forward.”
Google saw easy beats on both revenue and earnings. In the first case, Google came in half a billion dollars above expectations ($27.77 billion against $27.2 billion), representing a 24% increase, year over year. The company also managed to earn $9.57 per share against predictions of $8.34.
Google also saw more success from its “other revenues”, which include hardware, cloud computing and more. The company brought in $3.4 billion from this segment in the third quarter, up from $2.43 billion in the year ago quarter.
Despite the problems that have plagued it in regulators offices and the media, Google’s share price has continued to rise throughout the year, hitting an all time high last week. As its third quarter earnings show, this is predicated on a strong underlying business. With revelations that there may have been fewer Russian ads on Google platforms than we previously believed during the 2016 U.S. electoral cycle, the company looks to be on a solid winning streak. We’ll learn more about the Russia business when it testifies in front of Congress on Nov 1.
Dominion holds Alphabet, the parent company of Google, in its Global Trends Managed Fund.
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