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Alphabet shares hit as Q1 profits below expectations
Google websites saw 20 percent revenue growth to $14.3 billion.
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Tech giants Google and Microsoft were punished by investors last night after both fell short of expectations with quarterly results. That’s also the case as more customers use a fast-growing technology known as programmatic advertising.
The company’s earnings per share of $7.50 missed analyst expectations of $7.97 by a full 47 cents, while revenue of $20.26 billion fell shy of the mark by $110 million. On average, 38 analysts polled by Thomson Reuters estimated earnings of $7.96 per share for the quarter.
In addition to the 17 percent jump in revenue, the company has also experienced a 23 percent increase on a constant currency basis.
First quarter of 2015: $17.3 billion First quarter of 2016: $20.3 billion, up 17%. It seems that the decline in the price of ads is pressuring the company’s ad business, with cost per click flat sequentially and declining 9% year over year. This revenue gave them a net income of $4.2 billion – in other words, they earned a bucket load of money. Google’s advertising revenue rose 16% to $18.02 billion.
In spite of the segment’s revenue more than doubling to $166 million, Alphabet’s operating loss from its other bets had widened to 802 million Dollars from 633 million USD according to a report on The Australian Business Review. The weakness this quarter appears primarily around the company’s “Other Bets” category, which was established to pursue new and emerging businesses like Google Fiber, robotics, Internet-beaming balloons and health-care research.
Google CEO Sundar Pichai said on a conference call with analysts that more than half of Google’s customers access the company’s services on mobile devices. Google’s parent company Mountain View, California based Alphabet, is working hard with several projects starting from thermostats connected to Wi-Fi and nanoparticles for detecting cancer but could not generate the expected amount of profit in the first quarter. Revenue rose to US$166mil (RM648.32mil) from US$80mil (RM312.22mil).
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Compared to Google’s overall business, Wieser said losses in other bets were “too small to matter” at the moment.