Alphabet Inc (GOOGL) Earnings Miss, Revenue Beats, Stock Tumbles

Adjusted quarterly profit of $6.8 billion, or $9.70 per share, missed estimates of $7 billion, or $10 per share.

The company posted losses after dealing with a $9.9 billion charge that was related to the new USA tax law. Trump's tax changes are expected to be beneficial to the company in the long run. This $9.9 billion tax expense resulted in a net loss of $3.02 billion, or $4.35 a share, the company said Thursday. Piper Jaffray Companies restated a "buy" rating and issued a $1,150.00 target price on shares of Alphabet in a report on Thursday, October 19th.

Alphabet also announced a new board chair to replace Eric Schmidt, who announced his resignation in December. To the latter end, Alphabet's board approved an additional repurchase authorization for up to $8,589,869,056 of its Class C capital stock (with the exact figure chosen to represent another delightfully nerdy math joke).

"Our device shipments in the fourth quarter have more than doubled year-over-year", Google CEO Sundai Pichai added on the call. "These bets have enormous potential, and already they are showing real momentum and gaining traction", he said on a conference call. Doing simple multiplication, that means cloud computing could be a $4 billion business for Google annually. Analysts had expected EPS of $9.98 on revenue of $31.86 billion. Microsoft's Azure, widely considered the number two cloud service, nearly doubled in revenue from the year before, booking $5.3 billion in total cloud revenue.

Donald Trump flies out for Davos pushing 'America First' agenda
Trump, who is due to make his own speech on Friday, argues that a strong US economy is a boon to the wider world. But the president, in a gathering dominated by the rich, is in a comfort zone underscored by his own wealth.

The company said aggregate paid clicks increased 43 percent year-over-year and 18 percent from last quarter.

However, the revenue Google earns from AdX, DBM, AdMob and AdSense is just one-fifth of what it earns from its own properties, including search and YouTube, meaning the impact of flat revenue in this category isn't as notable. Alphabet chief financial officer Ruth Porat said that the division's expanded go-to-market team and enterprise-grade products helped drive its revenue growth over the past two years, comments that Pichai echoed. Those numbers gained 21.4% to $24 billion last quarter, and represented around 87% of total Q3 revenues. Google ad revenues increased to $27.2 billion from $22.4 billion a year ago. The operating loss on other (Bets) revenues totaled $916 million, down from $1.09 billion in the year-ago quarter.

Here again, Alphabet opted not to provide specific revenue or earnings guidance looking forward. "Overall, we are interpreting the quarter's results favorably if only because they were ahead of our conservative expectations".

For those keeping track, that's the most money Alphabet has pulled in from its "other revenues" segment, which is where you and I probably spend most of our money.


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