The surge was enough to push Alphabet’s shares up 6% in after-hours trading, valuing the company at more than $554 billion U.S. That makes the corporate entity formerly known as Google Inc. and now known as Alphabet Inc. worth more than Apple, which was previously the most valuable public company in the world at $535 billion U.S. Ruth Porat, Alphabet’s chief financial officer, put the losses down to the variation and early stages of the projects falling under this banner.
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Despite its massive spending on futuristic but typically unprofitable projects, including self-driving cars, Google’s strong results in its fourth-quarter search and advertising business was the cause of a 24 percent increase in its revenue, to $21.3 billion, compared to the fourth quarter of 2014.
Alphabet is now reporting its earnings using two segments: Google and Bets. Alphabet’s market cap is now around $560 billion, while Apple, formerly the most valuable company, has a market cap of $540 billion.
Porat said the strong revenue growth was a return on years of investment in mobile search, YouTube and so-called programmatic advertising, which involves ads being sold automatically using software.
“Keep in mind that Other Bets represents an aggregation of businesses, many of which operate in distinct sectors with different business models”, she said in an earnings call transcribed by Seeking Alpha.
Its overall results were better than expected.
Meanwhile, Alphabet’s other companies together produced an operating loss of $1.2 billion on revenue of just $151 million.
This translate to a profit margin of 40 percent while Apple recorded an operating profit margin of 32 percent in its most recent quarter.
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As a reminder, the Google segment includes collective results from Search, Android, Maps, Chrome, YouTube, Google Play, and Gmail – all seven of which individually boasted over one billion users during the quarter – as well as Ads, Commerce, Apps, and Cloud and hardware products. This generated net a profit of $4.9bn, a 25 percent increase over previous year.
