Wall Street had estimated that Alphabet would report $8.10 on revenue of $20.8 billion, and these predictions were considered high at the time.
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The news beat analyst expectations and sent the company’s shares skyrocketing. The share price of the firm formerly known as Google popped in after-hours trading Monday following a strong earnings report, sending its market capitalization to $550 billion.
It means Alphabet’s market value stood at 555 billion United States dollars (£386 billion), compared with Apple which is valued at 533 billion U.S. dollars (£371 billion). The Web company had been inching closer to the iPhone maker in recent weeks as investors lost confidence in Apples smartphone business and wagered that Alphabet has a clearer path to growth. It’s a potentially big shift for Apple, which has held bragging rights as the world’s most valuable company for most of the past four-and-a-half years, it said.
The change in sentiment coincided with Google’s hiring of a new chief financial officer, Ruth Porat, last May.
For its earnings reports, that means Alphabet will report its results in two categories: Google and “Other Bets”. It garnered $23.4 billion operating profit at a margin of 31.9 percent.
Similarly, Google generated an operating income of $6.77 billion, up 30% on the previous year, while Other Bets recorded a $1.24 billion loss, wider than the previous and year-ago quarters.
It is an indication that Google’s core business is thriving. Even though Apple has also been building expertise in cars and AI, the secretive company has kept much of that under wraps.
Industry tracker, eMarketer, has projected that Google will remain the dominant player in worldwide search advertising, raking in United States dollars 45.58 billion in revenue this year to claim a share just shy of 57 percent of total spending on such ads.
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Aggregate paid clicks rose 31% year over year, driven by 40% growth in paid clicks on Google websites and a 2% increase in paid clicks on Google Network Members’ sites. The aggregate cost-per-click also decreased on the year over year basis by 13%. That compares to a loss of $1.9 billion USA a year earlier.
