Alphabet: Results almost in line with expectations, the title climbs

Alphabet: Results almost in line with expectations, the title climbs

by Nivedita Balu

(Reuters) – Alphabet, Google’s parent company, released quarterly results near expectations on Tuesday, suggesting that its search engine and advertising business will be able to weather a possible recession in major economies over the next the year to come.

The group’s stock rose 3.5% in post-closing trading on Wall Street.

In the April-June period, the tech giant posted revenue of $69.69 billion, up 13% year-on-year, while consensus was $69.88 billion, according to data. Refinitiv.

Investors were apprehensive about the results of Alphabet, while analysts had been cautious on forecasts for advertising spending.

Concerns had been fueled by disappointing results from Snap and Twitter, as many tech companies scaled back or froze their hiring programs.

With rising wages and skyrocketing fuel prices in particular, companies have cut their advertising budgets, even for online ads that were considered essential during the COVID-19 lockdowns.

The strength of the dollar is also weighing on the income of American multinationals from abroad.

Accounting for 81% of Alphabet’s quarterly revenue, the group’s ad sales came in at $56.29 billion, slightly below consensus of $56.67 billion.

This is the first time since 2015 that Google’s parent company has posted sales below expectations for two consecutive quarters, after disappointing in the January-March period.

Alphabet reported quarterly profit of $16 billion, or $1.21 per share, below Wall Street expectations of $1.29 per share.

(Report Paresh Dave and Nivedita Balu; French version Jean Terzian)

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