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Alphabet reports low earnings and revenue on big YouTube miss

Sundar Pichai, CEO of Alphabet Inc., gestures as he speaks during a discussion on artificial intelligence at the European Economic Think Tank Bruegel in Brussels, Belgium, on Monday, January 20, 2020. Pichai called on the US and the EU to coordinate regulatory approaches to artificial intelligence that calls their adaptation critical.

Geert Vanden Wijngaert | Bloomberg | Getty Images

Alphabet reported weaker-than-expected earnings and revenue for the first quarter on Tuesday. The stock fell about 5% in extended trading.

Here are the results:

  • Earnings per share (EPS): 24.62 USD pr. share against the expected $ 25.91, according to Refinitiv
  • Income: $ 68.01 billion against the expected $ 68.11 billion according to Refinitiv
  • YouTube Ad Revenue: $ 6.87 billion against $ 7.51 billion expected, according to StreetAccount
  • Google Cloud Revenue: $ 5.82 billion against the expected $ 5.76 billion according to StreetAccount
  • Traffic acquisition costs (TAC): $ 11.99 billion against the expected $ 11.69 billion according to StreetAccount

Google’s revenue came in at $ 68.01 billion, up 23% from the same period last year. It is a slowdown from 34% growth in the first quarter of 2021, when the economy reopened from the pandemic.

The company reported $ 54.66 billion in advertising revenue for the quarter – up from $ 44.68 billion the year before.

YouTube’s advertising revenue for the quarter was lower than analysts’ expectations. The video site was a particular beneficiary of the pandemic, as users were primarily at home on their devices. The loss also comes as TikTok occupies a growing share of the social media video market.

Porat says YouTube is mostly “modest growth” in direct-response ads. The primary deceleration reflects patching in the exception result in the first quarter of 2021, she says on guard.

CEO Sundar Pichai said in an interview with investors that YouTube’s TikTok competitor “Shorts” now has 30 billion daily views, which is twice as many views in the previous quarter and four times as many as the year before.

Google’s cloud business was unique in the quarter, growing by 44% and beating estimates as more large companies move their workloads away from their own data centers. However, the cloud division is still losing money and reporting an operating loss of $ 931 million compared to $ 974 million a year earlier.

During the quarter, Google stopped much of its Russian operations due to the invasion of Ukraine. Revenue growth in the European region, which also includes the Middle East and Africa, fell to 19% in the first quarter from 33% a year earlier.

Alphabet’s Other Bets, which includes its life sciences companies and the self-driving car unit Waymo, nearly doubled its revenue from the previous year, bringing in $ 440 million from $ 198 million the year before. The unit lost a little more than the year before by $ 1.15 billion.

Traffic Acquisition Costs (TAC), the metric used to show how much the company pays other sites to acquire traffic, came in over $ 11.99 billion than Wall Street expected.

Google’s other revenue segment, which includes hardware, Play Store and YouTube revenue without advertising, reached $ 6.81 billion, slightly higher than the year before.

Alphabet’s share has fallen by 18% for the year from Tuesday’s closing time. Based on post-closing trading, it is at its lowest since May 2021.

This is breaking news. Please come back for updates.

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