Alphabet Revenue Beats Wall Street Estimates; Shares Jump

Alphabet Results Numbers

Google's parent company, Alphabet, just released its fourth-quarter earnings, which shows strong growth across much of the business.

Overall, Google took in slightly more than $46 billion in revenue from digital ads, with $6.9 billion of that money made from a growing advertising business at global video-sharing platform YouTube, according to the earnings report.

Originally estimating an EPS of $15.90, Google managed to close out the fourth quarter with a total EPS of $22.30.

Alphabet revenue in the final three months of previous year hit almost $57 billion, compared with $46 billion in the same period in 2019, according to the internet titan.

The quarter's outcomes "replicate the helpfulness of our services and products to folks and companies, in addition to the accelerating transition to on-line providers and the cloud, " stated Google and Alphabet CEO Sundar Pichai within the report.

Google's lead over the global internet advertising market is shrinking as Amazon.com Inc becomes a bigger threat and China-focused vendors such as Alibaba grow quickly.

The cloud computing unit at Google brought in $3.8 billion in the quarter, compared to revenue of $2.6 billion in the same period a year earlier.

Alphabet said it expects a $2.1 billion boost to operating results in 2021 after a new assessment extended the useful life of its servers and networking gear by a year or more. However, sales and marketing expenses declined almost 8% for the fourth quarter from $5.73 billion to $5.31 billion for Q4 and declined 3% for the whole year.

Cloud sales, also benefiting from the pandemic, were $3.83 billion, or $13.1 billion for the full year, up 46% from 2019.

"It was a great end to a challenging year", Ruth Porat, Alphabet's chief financial officer, told analysts during a conference call. Wall Street is modeling adjusted earnings to jump 80%, to $9.03 a share, on a revenue increase of 27%.

"We saw significant acceleration of brand spending on YouTube Network revenues in the fourth quarter", he added indicating the views YouTube continues to get and how advertisers are keen on putting their brands right in front of it all. That said, JPMorgan analyst Doug Anmuth said in a note last week that "we remain bullish on Amazon, with strong e-commerce and public cloud trends continuing to date and Amazon well-positioned as the clear leader in both". That is more in line with the industrys annual growth during the past decade, except a year ago when digital ad spending rose by just 8% because of the recession triggered by the pandemic.

Google's latest batch of earnings is here, closing out the fiscal year for 2020.

Related:

Comments


Other news