Google parent Alphabet Inc. reported quarterly results that exceeded Wall Street estimates Tuesday, initially boosting shares 7% in after-hours trading. The company’s board also announced a 20-for-1 stock split.
The search-engine giant GOOGL,
Revenue after removing traffic-acquisition costs ($13.4 billion) was $61.9 billion, compared with $46.43 billion in the year-ago period. Overall revenue spiked 32% to $75.3 billion. Analysts surveyed by FactSet had estimated net income of $27.68 a share, on ex-TAC revenue of $59.25 billion.
Equally important, Alphabet’s operating margin improved to 29% in the quarter, vs. 28% in the same quarter a year ago.
“[The fourth quarter] saw ongoing strong growth in our advertising business, which helped millions of businesses thrive and find new customers, a quarterly sales record for our Pixel phones despite supply constraints, and our Cloud business
continuing to grow strongly,” Alphabet Chief Executive Sundar Pichai said in a statement announcing the results.
In a conference call following the earnings report, Alphabet Chief Financial Officer Ruth Porat said the quarter was driven by strong advertising spending, consumer online activity, and “substantial” Google Cloud revenue growth.
Google’s total advertising rose to $61.2 billion from $46.2 billion a year ago. Search comprised $43.3 billion, vs. $31.9 billion a year ago.
YouTube ad sales continued to outperform, jumping to $8.6 billion from $6.9 billion a year ago. YouTube recently hit 5 trillion all-time views, Pichai added in the conference call.
Google’s Cloud revenue soared 45% to $5.5 billion, though the division continues to trail rivals Amazon.com Inc. AMZN,
Google’s stock is down 5% so far this year. The broader S&P 500 index SPX,
“Google’s strong results offer further evidence that they are almost completely immune to supply chain issues as well as recent privacy changes to Apple’s iOS,” Jesse Cohen, senior analyst at Investing.com, said in an email message. “In our view, Google remains one of the best-positioned companies in the tech space as the current operating environment has created a perfect backdrop for the digital advertising giant to continue to thrive.”
Alphabet did not provide first-quarter guidance in its earnings report.
