Google’s Parent Company, Alphabet, Exceeds Revenue Expectations

Google’s Parent Company, Alphabet, Exceeds Revenue Expectations

Google’s parent company, Alphabet Inc, has exceeded the expectations of analysts for its first fiscal quarter. The company reported its earnings for the quarter that ended on March 31st.

“We delivered ongoing strong revenue growth,” said Google and Alphabet CFO, Ruth Porat, during the company’s earnings call Monday.

According to the reported earnings, Alphabet Inc’s earnings per share are $9.93. The company generated revenue of approximately $31.15 billion as compared to revenue generated last year for the same quarter, which was $24.75 billion. Net income reported for the quarter is $9.4 billion compared to $5.43 billion last year. This makes the adjusted earnings of $13.33 per share as compared to the $7.71 for Q1 of 2017.

These numbers beat the analysts’ estimation of $30.31 billion and earnings of $9.31 per share. Alphabet’s stock gained $17.55, or 1.64% during the after-hours trading directly following the earnings release, however, was later down by 0.5% as the company executives gave details of their noteworthy investments made in hardware and other upcoming businesses.

As the company witnessed strong growth in sales numbers, its traffic acquisition costs continued to increase as a percentage of revenue and the price of real estate and computing power went up. The company also reported that its Nest smart home unit lost $621 million in 2017.

Due to the new accounting laws, Alphabet had to report the unrealized gains and losses from its investments. They reported a one-time increase in equity securities of $3 billion, which could be because of its investment in Uber in 2013.

As expected, Google’s advertising business had a significant contribution to this revenue, posting $26.642 billion in the first quarter, which is up by 20 percent every year. Alphabet’s “other revenues” comprise of its cloud business and hardware sales which are close to $4.3 billion.

Google Chief Executive, Sundar Pichai, told analysts Monday that, “It’s important to understand that most of our ad business is search, where we rely on very limited information, essentially what is in the keywords to show a relevant ad.” Adding further, he said that YouTube is a key revenue generator for the company and that Google is investing in new content, which includes live-streams.

Asked about new European privacy rules, Pichai said that the company expected to be ready for the implementation of the GDPR next month. “We started working on GDPR compliance over 18 months ago,” he said. “It’s really important, and we care about getting it right.” He added that the company was committed to bringing new privacy controls to consumers worldwide.

Tanuja Thombre
Tanuja Thombre
A Soft Skills and Behavior Trainer by passion and profession, with 8 years of experience into Mortgage Banking sector. Currently I am working as a Training Consultant and I cater to the training needs across various industries. This also allows me to interact with, train and learn various aspects of human modes. Adorned with certifications from various institutes like Dale Carnegie & Steven Covey. I have a natural instinct for writing; every once a while, a Blog, a short article and in the future I plan to author a Book. When it comes to writing, I believe there is seldom anything as appealing as Simplicity.

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