Alphabet logs $39.3 bn in revenue on Google ad business

The Google name is displayed outside the company's office in London Britain. Toby Melville Reuters  File

The Google name is displayed outside the company's office in London Britain. Toby Melville Reuters File

Alphabet, the parent company of Google, said its total revenue for the final three months of 2018 was $39.3 billion, an increase of 22% from the same period a year earlier, according to a company earnings report released Monday.

Alphabet's revenues for the quarter were 22% higher than the same period a year ago and the company made a profit of $8.9bn, the company announced on Monday.

Alphabet's fourth quarter revenue rose 22 per cent from a year ago to $39.28-billion, compared to the average expectation of $38.93-billion among analysts tracked by Refinitiv.

Traffic acquisition costs, the fees Google charges companies to be the top search engine, topped $7.64 billion.

The company's profitability remained robust as its operating income rose 21 percent to 8.2 billion dollars over the previous quarter.

Other revenue - which includes hardware, Play Store, and Google Cloud enterprise efforts - reported $6.4 billion.

Google doesn't report its cloud revenues, itself an indication that it continues to trail far behind market leader Amazon Web Services Inc. and Microsoft Corp. Overall, it spent almost $7 billion on capital expenditure projects this quarter, a jump of 80 percent compared to $4.3 billion in the same quarter past year. Earnings per share were actually $12.77. Facebook results beat Wall Street estimates last week.

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Concerns grow over how Google, and others, use our data and share it with advertisers. Advertising directors speaking to CNBC have said some brands were moving 50 to 60 percent of their ad spending from Google to Amazon. Google remains behind rival Amazon.com Inc in the cloud, said Cordwell. But operating losses also ballooned to $1.3 billion, a 78 percent increase since the year-earlier quarter.

"We feel a deep sense of responsibility to do the right thing and are continuing to build privacy and security into the core of our products keeping users data safe and secure with the industry's best security systems and giving people better and clearer controls".

Earnings per share on the year were $43.70, up from $18.27 last year, but short of $45.79 analysts estimated.

"Providing accurate and trusted information at the scale the Internet has reached is an extremely complex challenge and one that is constantly getting harder", Google chief executive Sundar Pichai said on an earnings call.

He's happy Google is spending heavily on YouTube, cloud and hardware.

Ad revenue growth, as always, will be paramount to investors, while the company's "Other Bets" segment is expected to rise by more than a third.

(The company said its growth in capital spending and hiring will moderate this year.) Stock watchers appeared to focus on the negative for Google. Operating losses were $1.33 billion.

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