This post was originally published on this site
Alphabet Inc.’s business expanded faster than it has in more than a year after Google’s parent company reported a rebound in advertising that pushed quarterly revenue up 11% year-over-year.
“The fundamental strength of our business was apparent again in Q3, with $77 billion in revenue, up 11% year over year, driven by meaningful growth in Search
and YouTube, and momentum in Cloud. We continue to focus on judicious capital allocation to deliver sustainable financial value,” Alphabet Chief Financial Officer Ruth Porat said in a statement.
Alphabet
GOOGL,
GOOG,
reported fiscal third-quarter net earnings of $19.7 billion, or $1.55 a share, compared with net earnings of $13.9 billion, or $1.06 a share, in the year-ago quarter.
Total revenue was $76.7 billion, compared with $69.1 billion a year ago. Sales minus total acquisition costs (TAC) was $64.1 billion, compared with $57.3 billion a year ago.
Analysts surveyed by FactSet had expected on average net earnings of $1.46 a share on revenue of $75.96 billion and ex-TAC revenue of $63.1 billion.
Despite the better-than-expected results, Google’s stock initially dropped nearly 6% in extended trading Tuesday before briefly rallying.
At least two analysts said investors were likely disappointed by the relatively weak performance for the company’s Google Cloud platform, which is at risk of falling further behind competition from Microsoft Corp.’s
MSFT,
Azure and Amazon.com Inc.’s
AMZN,
AWS.
Shares of Alphabet are up 57% so far this year, while the broader S&P 500 index
SPX
has improved 11%.
Google’s total advertising sales climbed to $59.65 billion from $54.5 billion a year ago, but edged analysts’ average expectations of $59.2 billion. Google Cloud brought in $8.4 billion, compared with $6.9 billion last year. YouTube ad sales rose to $7.95 billion from $7.07 billion a year ago.
Investors and Wall Street are focused on how AI can be monetized. While Microsoft Corp.
MSFT,
is selling its AI version of Bing, Google’s competing entry, Bard, is still being tested by users.
Alphabet is also ramping up AI initiatives to improve operational efficiency and productivity for 2023 and beyond. The company is using AI in its finance organization and analytics. But Alphabet did not break out AI revenue in Tuesday’s earnings report.
