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Google parent Alphabet's shares fall as profits miss target | Google parent Alphabet's shares fall as profits miss target |
(35 minutes later) | |
Google parent Alphabet's latest profit figures have missed forecasts, sending the tech giant's shares falling in extended trading on Wall Street. | Google parent Alphabet's latest profit figures have missed forecasts, sending the tech giant's shares falling in extended trading on Wall Street. |
Profits rose 8% to $5.3bn (£4.2bn) for the last three months of 2016, fuelled by more advertising on mobile phones and YouTube. | |
But analysts had expected more, and Alphabet's shares fell almost 3% . | But analysts had expected more, and Alphabet's shares fell almost 3% . |
However, revenue for the quarter topped $26bn, up 22% from the same period the year before. | However, revenue for the quarter topped $26bn, up 22% from the same period the year before. |
Google's advertising revenue, which accounts for the bulk of its business, rose 17.4% to $22.40bn in the quarter. | Google's advertising revenue, which accounts for the bulk of its business, rose 17.4% to $22.40bn in the quarter. |
Paid clicks, or clicks on Google ads, rose 36%, compared with a 33% increase in the third quarter. Paid clicks are those ads on which an advertiser pays only if a user clicks on them. | Paid clicks, or clicks on Google ads, rose 36%, compared with a 33% increase in the third quarter. Paid clicks are those ads on which an advertiser pays only if a user clicks on them. |
"Our growth in the fourth quarter was exceptional," Alphabet chief financial officer Ruth Porat said in a statement. "We're seeing great momentum in Google's newer investment areas and ongoing strong progress in Other Bets." | |
'Tremendous potential' | |
For earnings purposes, Alphabet separates operations such as self-driving cars and broadband into its Other Bets category, which nearly doubled revenue to $262m in the quarter but still posted a loss of nearly $1.1bn. | |
Under its new structure, Alphabet is seeking to expand beyond its role as a search engine and develop new revenues streams. | |
Ms Porat pointed to growth app sales, hardware and the cloud business. "We see tremendous potential ahead for these businesses, as well as in the continued development of non-advertising revenue streams for YouTube," she said. |
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