Google, what’s going and what’s wrong with Alphabet
Alphabet (Google) third quarter profit and revenue still rise and exceed analysts' expectations, but disappoint YouTube and Google Cloud
Second consecutive quarterly better than expected for Alphabet, Google's parent company.
Alphabet's advertising business is booming. The third quarter closed with earnings per share of $ 27.99 ($ 18.9 billion) compared to $ 23.48 expected by analysts. The turnover was equal to 65.12 billion, better than the 63.34 billion expected by the market.
In addition to stellar quarterly results, the Sundar Pichai-led holding reported an increase in search ad revenue apparently indicating it was not negatively impacted by Apple's privacy update.
Google search engine advertising revenue jumped 43% to $ 53.13 billion versus $ 37.1 billion in the same period of 2020.
But they disappoint YouTube and Google Cloud.
After closing yesterday's session up 1.35%, the stock of the parent company of Google was slightly down in the afterhours, immediately after the publication of the accounts. Since the beginning of the year, it earns 58%. Meanwhile, Google is also facing a number of antitrust lawsuits.
All the details.
REVENUES AND PROFITS FLY
The US conglomerate reported earnings per share of $ 27.99, versus experts' expected $ 23.48 billion, on revenues of $ 65.12 billion, with a consensus of $ 63.34.
Revenue increased 41% year-over-year; profits increased by nearly 69%, points out The Verge .
"Research is at the heart of what we do," said Alphabet CEO Sundar Pichai in the call with analysts following the publication of the results. For the quarter, that business's revenue increased 44% to $ 37.93 billion.
DRIVE THE ADVERTISING ACTIVITY
Google's advertising revenue increased from $ 37.1 billion in the same quarter of 2020 to $ 53.13 billion. This is a 43% increase. The data is particularly encouraging: it shows that advertisers are still willing to spend money to acquire new customers, which is surprising at a time when shortages are making it difficult to meet increased demand.
LESS YOUTUBE
The performance of YouTube, Google's online video platform, was less sparkling. Revenues from YouTube were 7.20 billion, below the 7.40 billion expected by analysts.
AND THE CLOUD
The revenues of Google Cloud are also lower than expected, at 4.99 billion dollars, against the 5.07 billion of the consensus, with a loss that has fallen from 1.21 billion to 644 million dollars. Google's cloud division has not yet reached profitability.
However, cloud revenues grew a full 1.5 billion year-over-year to $ 4.99 billion (+ 45%), from $ 3.44 billion in 2020, and that's still an improvement over 4 , 6 billion in revenue for the last quarter.
HOW DOES WAYMO GO
Revenues from the Other Bets segment, which includes self-driving car company Waymo, increased slightly from $ 178 million to $ 182 million, with losses up from $ 1.1 billion to $ 1.29 billion from a year earlier. . Traffic Acquisition Cost (TAC) was $ 11.50, compared to $ 11.16 analysts expected.
RECORD DESPITE THE REGULATORY PRESSURES
Finally, the specialized media point out that the strong performance comes even as Google faces continuous scrutiny by lawmakers and regulators. As Cnet recalls, the company is facing several major antitrust lawsuits, including a landmark case from the US Department of Justice and two complaints from bipartisan coalitions of states.
At the same time, lawmakers are focusing on Google's dominance in web search and digital advertising. The company processes about 90% of all online searches in the United States, a dominant market position that underlies its massive advertising activity. Advertising activity, in turn, generates nearly all of Google's sales.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/google-cosa-va-e-cosa-non-va-in-alphabet/ on Wed, 27 Oct 2021 11:39:53 +0000.