As demand for cloud services increased and ad sales performed better than anticipated, Alphabet Inc. said on Tuesday that it would repurchase $70 billion worth of stock and reported first-quarter profit and revenue beyond projections.
Investors applauded the buyback plan, driving shares of the parent company of Google up as much as 4% in after-hours trading before giving back gains to close at 1.6% higher. Cloud service demand increased, and Google's ad sales performed better than anticipated.
Alphabet announced first-quarter ad sales of $54.55 billion, a little decline from the prior year, but still exceeding analyst expectations of $53.71 billion.
It was the company's third such fall since going public in 2004, but it was the second consecutive decline after a 3.6% decline in fourth-quarter ad sales.
Alphabet announced earnings per share of $1.17 after items, exceeding the consensus estimate of $1.07 per share.
"Google exceeded both revenue and earnings per share expectations this quarter, but reasons for investor optimism are modest," said Insider Intelligence senior analyst Max Willens.
Although it was "notable," in his opinion, that the cloud computing industry could earn a profit, "the reality is that Google Cloud continues to easily lag behind its two most significant competitors, and its growth is slowing." The unit's sales increased by 28% to $7.41 billion.
In addition, advertisers, who account for the majority of Alphabet's sales, have reduced their expenditure as a result of consumers returning to in-store buying following the relaxation of masking and other limitations. With new channels like TikTok, which has a younger audience, marketers are experimenting more.
In the meanwhile, the corporation made the decision to eliminate around 12,000 jobs in January in an effort to maintain strict cost management amid recessionary concerns. On a conference call with investors, Chief Financial Officer Ruth Porat stated that she anticipated capital expenditures to be "modestly higher" this year than in 2022.
In addition, Alphabet has worked to reduce spending on things like employee benefits and the utilisation of corporate assets. In a March internal email, Porat warned staff to expect further cost-cutting measures in the months to come.
In order to invest in priorities like cloud computing and artificial intelligence, she said that Alphabet works to "durably engineer our cost base" during the call on Tuesday.
The Google division of Alphabet has been rushing to release new artificial intelligence algorithms that can provide lengthy responses to questions and other prompts in order to keep up with competitors, particularly Microsoft Corp. Microsoft made a $10 billion investment in OpenAI, whose ChatGPT software has been making waves in Silicon Valley ever since a free version was made available last November.
The rise of its cloud computing and Office productivity software businesses helped Microsoft outperform third-quarter profit and revenue expectations on Tuesday, sending its shares up 8.5% in after-market trade. Amazon.com Inc. and Meta Platforms Inc., two competing internet businesses, saw their shares rise 2.3% and 5.3%, respectively.
Refinitiv reports that Alphabet's revenue for the three months ending March 31 was $69.79 billion, exceeding predictions of $68.95 billion.
For the first three months of the year, it posted a net profit of $15.05 billion, down from $16.44 billion in the same period last year.
(Source:www.usnews.com)
Investors applauded the buyback plan, driving shares of the parent company of Google up as much as 4% in after-hours trading before giving back gains to close at 1.6% higher. Cloud service demand increased, and Google's ad sales performed better than anticipated.
Alphabet announced first-quarter ad sales of $54.55 billion, a little decline from the prior year, but still exceeding analyst expectations of $53.71 billion.
It was the company's third such fall since going public in 2004, but it was the second consecutive decline after a 3.6% decline in fourth-quarter ad sales.
Alphabet announced earnings per share of $1.17 after items, exceeding the consensus estimate of $1.07 per share.
"Google exceeded both revenue and earnings per share expectations this quarter, but reasons for investor optimism are modest," said Insider Intelligence senior analyst Max Willens.
Although it was "notable," in his opinion, that the cloud computing industry could earn a profit, "the reality is that Google Cloud continues to easily lag behind its two most significant competitors, and its growth is slowing." The unit's sales increased by 28% to $7.41 billion.
In addition, advertisers, who account for the majority of Alphabet's sales, have reduced their expenditure as a result of consumers returning to in-store buying following the relaxation of masking and other limitations. With new channels like TikTok, which has a younger audience, marketers are experimenting more.
In the meanwhile, the corporation made the decision to eliminate around 12,000 jobs in January in an effort to maintain strict cost management amid recessionary concerns. On a conference call with investors, Chief Financial Officer Ruth Porat stated that she anticipated capital expenditures to be "modestly higher" this year than in 2022.
In addition, Alphabet has worked to reduce spending on things like employee benefits and the utilisation of corporate assets. In a March internal email, Porat warned staff to expect further cost-cutting measures in the months to come.
In order to invest in priorities like cloud computing and artificial intelligence, she said that Alphabet works to "durably engineer our cost base" during the call on Tuesday.
The Google division of Alphabet has been rushing to release new artificial intelligence algorithms that can provide lengthy responses to questions and other prompts in order to keep up with competitors, particularly Microsoft Corp. Microsoft made a $10 billion investment in OpenAI, whose ChatGPT software has been making waves in Silicon Valley ever since a free version was made available last November.
The rise of its cloud computing and Office productivity software businesses helped Microsoft outperform third-quarter profit and revenue expectations on Tuesday, sending its shares up 8.5% in after-market trade. Amazon.com Inc. and Meta Platforms Inc., two competing internet businesses, saw their shares rise 2.3% and 5.3%, respectively.
Refinitiv reports that Alphabet's revenue for the three months ending March 31 was $69.79 billion, exceeding predictions of $68.95 billion.
For the first three months of the year, it posted a net profit of $15.05 billion, down from $16.44 billion in the same period last year.
(Source:www.usnews.com)
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