Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

As Google invests in new areas, Alphabet misses earnings forecast

As Google invests in new areas, Alphabet misses earnings forecast

Under intense regulatory pressure, the search giant looks to broaden its business beyond search, advertising and video.

Google parent Alphabet Inc missed analysts' estimates for quarterly profit on Monday as it reported its highest-ever quarterly expenses, sending shares down even though revenue growth topped expectations.

The world's dominant provider of internet search, advertising and video services has increased spending in recent years on certain new business areas - including cloud computing and consumer electronics - that it views as essential to maintaining its industry leadership in the face of stiff competition from Amazon.com Inc and Microsoft Corp.

Google, however, provides limited product-level financial disclosures to United States government agencies compared with some peers, leaving investors increasingly uncertain about how regulatory scrutiny, advertiser boycotts and global trade tensions are affecting operations.

As a result, analysts say Alphabet shares have underperformed relative to rivals, rising 17 percent in the last year - compared with a 33 percent gain for Microsoft and a 29 percent increase for Facebook Inc, the internet's second-biggest seller of advertising.

Shares of Google closed 1.95 percent higher in regular trading on Monday. The shares rose on news that Google had made an offer to acquire US wearable-device maker Fitbit Inc. But Alphabet shares two percent in after-hours trade to $1,264.


'A hint of pessimism'


Google has tried to demonstrate that its cloud-computing business is roaring, disclosing last quarter about two billion dollars in revenue and saying that plans continued to hire thousands for that unit to stoke growth.

Haris Anwar, analyst at financial markets platform Investing.com, said the quarterly results cast a cloud. "An earnings miss at a time when the Big Tech companies are being probed for their business practices adds to the uncertainty and creates a hint of pessimism around the company," he said in an email to the Reuters news agency.

In hardware, Google's debut in May of the Pixel 3a - its most affordable smartphone yet - went well according to technology analysts. It boosted Google's overall smartphone sales this summer in a typically slow quarter.

Google also has tried to reassure investors that there is no weakness in its YouTube video unit, while expressing confidence in its business overall through share buybacks.

But cash continues to be spent and higher costs loom as Google prepares for intensified clashes with regulators. Total expenses in the third quarter reached $31.3bn, about 25 percent higher than a year ago and topping the previous high of $31.1bn in the fourth quarter of 2018.

Google has previously acknowledged investigations by the US Congress, Department of Justice and 48 states into the company's competitive practices. It settled a privacy investigation by the Federal Trade Commission.

It also got an additional 90-day reprieve from an export ban that would restrict its relationship with Chinese smartphone maker Huawei, one of its top partners in distributing mobile apps.

Google has said it is cooperating with the increased scrutiny, while saying that it has survived calls for increased regulation many times.

Alphabet, which generates about 85 percent of its revenue from sales of ad space and ad technology, reported total third-quarter revenue of $40.5bn. That was up 20 percent over last year. Net income for the third quarter rose to $7.1bn, or $10.12 per share.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
×