Alphabet and its Google unit on Tuesday reported higher than expected fourth-quarter sales as the search giant's internet advertising, cloud computing and hardware businesses benefited over the Christmas season from the growing surge in online shopping.
Alphabet’s overall quarterly sales jumped 32 per cent to $75.3 billion (€66.8 billion), above the average estimate of $72 billion among financial analysts. Total Google revenue was $74.9 billion, above estimates of $71.652 billion.
Shares of Alphabet rose 6.4 per cent during after-hours trading to $2,930. The company also announced on Tuesday a 20-for-one stock split that would come in July if approved by shareholders.
The company's third-straight quarter of record sales reflects the growth of advert-laden Google services such as internet search, email and YouTube video streaming, since the pandemic made hybrid work and e-commerce customary across much of the world.
Google generates more revenue from internet adverts than any other company.
Google had said that during the third quarter it lost some sales because companies running low on product trimmed marketing and new iPhone privacy measures curtailed its ability to track users online.
Advertising
In the fourth quarter, advertising revenue rose 32.5 per cent to $61.2 billion, compared with the average estimate of $57.1 billion. Top rival Meta Platforms, owner of Facebook, reports financial results on Wednesday, including for the first time a breakdown of how its Reality Labs unit is faring compared with its advertising business.
Others including Amazon. com and ByteDance's TikTok have been taking small pieces of Google's share of the global advertising market.
Though market forecasters expect the trend to continue over the next few years, they do not expect major slippage in Google’s leading position. Google’s secondary businesses, including Cloud, also have been lifting overall sales.
Google Cloud, which trails Amazon and Microsoft in cloud services market share, increased revenue by 45 per cent to $5.5 billion, above estimates of $5.4 billion.
Alphabet also reported a quarterly sales record during the Christmas season for its Google Pixel smartphones despite supply constraints.
Alphabet’s quarterly profit was $20.6 billion or $30.69 per share, beating expectations of $27.56 per share and marking a fourth-straight quarter of record profit.
Alphabet’s profit benefits from unrealised gains from its investments in startups, and the company also got a boost last year from extending the useful life of its servers and networking gear.
Numerous lawsuits accusing Google of anticompetitive conduct in the advertising and mobile app store markets continue to be one of the biggest challenges facing the company. Google already has said its efforts to lower Play app store fees to assuage some of the concerns will hurt revenue.
Politicians in the US Congress are considering a long list of Bills aimed at reining in Google and the other tech giants, but none have become law. – Reuters
