While Apple’s market cap may be smaller, investors need to keep in mind that Alphabet is not the most widely owned stock versus Apple-and that Alphabet simply can not be pushed by outsiders to make changes if the company does not want to.
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Adjusted earnings of US$8.67 per share handily beat analysts’ average estimate of US$8.10 per share.
Google parent company Alphabet has overtaken Apple to becomes the world’s most valuable listed company, following its latest set of financial results.
Alphabet’s quarterly profit rose five percent to Dollars 4.92 billion as a result of remarkable rise in the company’s online advertising revenue, particularly due to searches done by holiday season shoppers using smartphones or tablets. Total revenue rose 18 percent with advertising remaining very strong. Network Members’ websites revenue up 7% YoY to 4.1 billion.
Alphabet shares hiked $23.78, or 3.1%, in the first half-hour of trading Tuesday morning, to $794.55 US, within a 52-week trading range of $521.72 U.S.to $794.55 U.S.
Google ad revenue climbed globally, gaining on both mobile devices and desktop computers, as per Alphabet Chief Financial Officer Ruth Porat.
“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.
The two tech companies have been neck and neck for months, but after Alphabet posted record profits in the fourth quarter, shares of the company spiked in after-hours trading. Meanwhile, Google’s advertising business is still the engine that is driving the company forward.
$4.9 billion net income in Q4 2015.
It was the first earnings report to separate Alphabet’s various companies, which includes its core business Google.
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Aside from Google, Alphabet comprises smart home division Nest, life extension project Calico, moonshot business Google X, high-speed internet infrastructure business Fiber, investment arm Google Capital, and future cities division Sidewalk. The aggregate cost-per-click also decreased on the year over year basis by 13%. “That’s going to build investors’ confidence about the other bets they’ve been making”.
