Alphabet, which owns Google, on Tuesday reported quarterly sales close to Wall Street’s projections, with investors relieved as the company skirted a series of lower-than-expected results.
Sales from Google’s ad business topped expectations, while ad revenue from YouTube, the cloud computing segment and Alphabet’s “other bets” unit were below estimates, according to data from FactSet and Refinitiv.
Alphabet shares rose 3% in aftermarket trading.
“Despite the disappointing quarter, expectations were so low that investors breathed a sigh of relief,” said Jesse Cohen, senior analyst at Investing.com.
Alphabet’s earnings were $16 billion, or $1.21 per share, compared with an average estimate of $1.29 per share. Alphabet’s earnings tend to be volatile due to gains or losses on the stakes it holds in startups, so investors look more at other numbers like revenue and costs.
Alphabet reported quarterly revenue of $69.69 billion, up 13% from the same period a year ago and almost in line with the average expectation of $69.88 billion among analysts monitored by Refinitiv.
Rising wages, as well as prices for fuel and other items, have forced some advertisers to cut back on marketing spend in 2022, including ads on internet services like Google, which have served as an essential link to consumers during the pandemic.
Last week, Snap and Twitter reported disappointing quarterly results, raising concerns about slowing ad spending. Snap shares are down 25% after their results.
“Google is relatively well positioned to weather the turbulent waters ahead,” said Evelyn Mitchell, analyst at Insider Intelligence.
In recent years, ad spending cuts have hurt social media companies more than Google. That’s because the company generates revenue through a wider range of functions in the advertising market, and search ads can be easier for customers to generate as they typically only include text.
(By Nivedita Balu and Paresh Dave)
Source: CNN Brasil
