Google’s wave of digital ad sales helps it crush revenue, earnings estimates


Google parent Alphabet Inc.’s stock immediately jumped 5% in extended trading Tuesday after it reported advertising sales that shot its revenue and earnings well past analysts’ estimates.

The search-engine giant
GOOGL,
-1.59%

GOOG,
-2.04%,
turbocharged by digital advertising, reported net income of $18.53 billion, or $27.26 a share, in its fiscal second quarter, compared with net income of $6.96 billion, or $10.13 a share, in the same quarter last year.

Revenue after removing traffic-acquisition costs ($10.93 billion) jumped to $50.95 billion from $31.6 billion in the year-ago period. Overall revenue soared 62% to $61.9 billion.

Analysts surveyed by FactSet had estimated net income of $19.24 a share, on ex-TAC revenue of $56.2 billion.

Of special note, Alphabet’s operating margin improved to 31% in the quarter, vs. 17% in the same quarter a year ago.

“Our strong second-quarter revenues of $61.9 billion reflect elevated consumer online activity and broad-based strength in advertiser spend,” Alphabet Chief Financial Officer Ruth Porat said in a statement announcing the results.

As is customary every quarter, search led the way with $35.85 billion in sales, compared with $21.3 billion in the same quarter a year ago. YouTube ad sales surged 84% year-over-year to $7 billion.

Google’s Cloud revenue climbed 54% to $4.63 billion, though the division trails rivals Amazon.com Inc. 
AMZN,
-1.98%
 and Microsoft Corp. 
MSFT,
-0.87%
in revenue.

The results belie a flurry of antitrust lawsuits from federal regulators and state attorneys general into the business practices of Google, namely its search business, as well as recent appointments to head the Federal Trade Commission and Justice Department’s antitrust division.

Alphabet shares are up 50% so far this year, while the broader S&P 500 index 
SPX,
-0.47%
is up 17% in 2021.



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