Alphabet Inc.’s stock initially slipped in extended trading Thursday after it missed slightly on revenue and earnings in a ho-hum quarterly result.
Google’s parent company reported fiscal fourth-quarter total revenue of $76.05 billion, up from $75.3 billion a year ago. Earnings were $13.62 billion, or $1.05 per share, compared with $20.64 billion, or $1.53 per share, last year. Alphabet’s revenue, minus traffic-acquisition costs (TAC), was $63.12 billion, vs. $61.9 billion a year ago.
“We’re on an important journey to re-engineer our cost structure in a durable way and to build financially sustainable, vibrant, growing businesses across Alphabet,” Chief Executive Sundar Pichai said in a statement announcing the results.
Analysts polled by FactSet expected Alphabet
GOOG,
GOOGL,
to report total revenue of $76.2 billion and earnings of $1.18 per share, with sales expected to be in-line with last year’s results and profit declining from the holiday season a year ago. Revenue, minus TAC, were modeled at $63.2 billion, which also suggests little to no growth from last year.
Google’s total advertising sales slid to $59 billion from $61.2 billion a year ago, missing analysts’ average expectations for $60.44 billion. Google Cloud was $7.32 billion, compared with $5.54 billion last year. YouTube ad sales slipped to $7.96 billion from $8.63 billion a year ago.
The financial results sent Alphabet shares down 4% in extended trading Thursday after shares climbed 7% during the regular session to close at $107.74.
A dip in digital advertising has defined the past few quarters for Google, Meta Platforms Inc.
META,
Snap Inc.
SNAP,
Pinterest Inc.
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and other companies dependent on ads. Meta’s better-than-expected quarterly report Wednesday was a sign of encouragement after Snap had another desultory quarterly performance.
Read more: Alphabet earnings: What to expect from the Google parent company
“After Alphabet’s Advertising revenue cycle reached peak growth” in the second quarter of 2021, revenue for this part of the business is set to decelerate for the sixth quarter in a row, said Monness, Crespi, Hardt analyst Brian White, who forecast a 3% drop in the recently completed quarter.
Alphabet’s stock has declined 24.7% over the past 12 months. The S&P 500 index
SPX,
is down 6.7% over the past year.
Credit: marketwatch.com