After Google’s parent firm revealed a comeback in advertising that drove quarterly revenue up 11% year over year, Alphabet Inc.’s business grew faster than it has in over a 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.
In comparison to the same quarter last year, when net earnings were $13.9 billion, or $1.06 per share, Alphabet GOOGL, +1.69% GOOG, +1.61% announced fiscal third-quarter net earnings of $19.7 billion, or $1.55 per share.
Compared to the previous year’s $69.1 billion, the total revenue was $76.7 billion. $64.1 billion was the sales less total acquisition costs (TAC) as opposed to $57.3 billion in the previous year.
According to a FactSet survey, analysts projected net earnings per share of $1.46 on revenue of $75.96 billion, or $63.1 billion excluding TAC.
In extended trading on Tuesday, Google’s stock fell about 6% despite the better-than-expected numbers before momentarily rising.
The comparatively poor performance of the company’s Google Cloud platform, which is vulnerable to competition from Amazon.com Inc.’s AMZN, +1.58% AWS and Microsoft Corp.’s MSFT, +0.37% Azure, is expected to disappoint investors, according to at least two analysts.
Alphabet’s stock has increased by 57% so far this year, compared to an 11% gain for the S&P 500 index as a whole (SPX).
Although it exceeded experts’ average estimate of $59.2 billion, Google’s total advertising sales increased to $59.65 billion from $54.5 billion in the previous year. $8.4 billion was made by Google Cloud, up from $6.9 billion the previous year. YouTube ad sales increased from $7.07 billion to $7.95 billion in the previous year.
Wall Street and investors are concentrating on the monetization of AI. Although Microsoft Corp. MSFT, +0.37% is offering its artificial intelligence version of Bing, people are still testing Google’s rival product, Bard.
In order to increase productivity and operational efficiency through 2023 and beyond, Alphabet is also stepping up its AI activities. The business uses analytics and AI in its financial department. But in its earnings announcement on Tuesday, Alphabet did not break out AI revenue.
