Alphabet, the owner of Google, generated $69 billion in sales in the third quarter, well below expectations. The share drops nearly six percent in after-market trading.
Alphabet’s A stock was down about six percent in after-market trading, after the company posted results well below expectations.
This shows the results:
- The company was expected to generate sales of $70.7 billion, but the company generated only $69 billion in revenue.
- Business volume growth was only 6 percent compared to the same period last year. In the past three years, Alphabet has been growing more than ten percent on a regular basis, and it hasn’t seen such low growth since the uncertain months after the coronavirus outbreak.
- Earnings for the company were expected to be $1.25 per share, but here too, Alphabet is disappointing. The company earned earnings per share of $1.06 per share.
- Google’s advertising revenue in particular is a huge disappointment, at $54.4 billion. That’s close to the same level it was in the same period last year, and it has seen almost no growth.
- Google Cloud, where Alphabet competes with both Amazon and Microsoft, could show growth slightly above expectations, but that’s only a small percentage of the company’s sales.
- Ad revenue from YouTube was also lower than expected, as this was the last time Alphabet provided results.
We are reallocating resources to our top growth priorities, Alphabet Chief Financial Officer Ruth Porat wrote in a comment on the results.
Alphabet is down 27 percent in the stock market so far this year.
Up front, there was a lot of excitement about what third-quarter results would show for Alphabet’s growth, as the company has seen a drop in ad revenue last year.
In other parts of the tech industry, companies have chosen to implement downsizing or hiring freezes, which has been seen in both Tesla and Facebook owner Meta doing so.
Alphabet owns more than 80 percent of its income from advertising, mainly from the search engine Google and the video service YouTube.
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