Alphabet stock slips despite revenue increase of 23% in 2018

Alphabet stock slips despite revenue increase of 23% in 2018

Revenue from Google properties rose to 27 billion from about $22 billion in the year-ago quarter. "But with talk of economic pressures on the horizon in the USA, noticeable sluggishness in their fourth-quarter performance could warn of more dramatic slowdowns in the digital advertising market, which had been relatively insulated while the ad giant enjoyed strong double-digit growth rates". It revealed an operating margin of 21 percent for the fourth quarter, which was lower than the projected 22 percent margin and the 23 percent margin it reported in Q4 2017.

"ORCOM00093-topic.html" class="local_link" > Alphabet beat Wall Street expectations for its fourth quarter earnings Monday, although its stock slid in after-hours trading over investor concerns about increased spending.

"In 2018, we delivered strong revenue growth, up 23 percent year-over-year", Alphabet CFO Ruth Porat said in a prepared statement.

A man walks past the logo of the USA multinational technology company Google.

Cost per click, which somewhat measures the amount Alphabet charges advertisers for each ad served on its web sites, plummeted 29 percent from 2017 and 9 percent from Q3.

The company has authorized a plan to buy back an additional $12.5-billion worth of its shares, Porat also said. The latter figure rose to $1.328 billion from last year's $748 million while TAC rose by a percent to $7.436 billion.

Google Cloud also drove higher expenses, mostly headcount, which rose from the third quarter by nearly 4,400 people, to 98,771.

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Google's main source of competition is not Facebook but Amazon. Among the more damaging of those was its work on a China-specific search engine which ultimately caused questions to be raised by the United States government. It's likely that the majority of that money was in hardware sales, as Google doesn't break down how much it brings in through hardware versus through cloud services.

(The company said its growth in capital spending and hiring will moderate this year.) Stock watchers appeared to focus on the negative for Google.

On Monday Apple briefly became the world's most valuable company once again as investors continued to absorb its better than expected results from last week. Little is known about the finances of YouTube, Google's homegrown smartphones and other hardware, its cloud-computing operation, and potentially promising experiments such as driverless cars.

Ad revenue growth, as always, will be paramount to investors, while the company's "Other Bets" segment is expected to rise by more than a third. Operating losses were $1.33 billion.

"Providing accurate and trusted information at the scale the Internet has reached is an extremely complex challenge and one that is constantly getting harder", Google chief executive Sundar Pichai said on an earnings call.

Alphabet's unaudited assets at the end of December 31st, 2018 totalled $232.79 billion United States dollars (roughly $305.39 billion CAD), an increase from Q4 2017's $197.30 billion USD (roughly $258.83 billion CAD).

After peaking in July, Google shares have fallen back to just above where they were trading early previous year. Most of those were engineers and product managers, with cloud the biggest-growing segment, Porat said.

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