Doing Business | IT & Technologies

October 28, 2016

Google parent Alphabet profit surges on mobile, video ads

Google parent Alphabet Inc bested analysts' estimates for third-quarter profit and revenue on Thursday as the search company showed it has honed its core business for the mobile era and is closing in on the next wave of computing.

Propelled by strong advertising on mobile devices and video site YouTube, Alphabet's net income climbed 27 percent to $5.06 billion. Revenue jumped 20 percent to $22.45 billion, marking the search giant's seventh straight quarter of double-digit revenue growth.

The company authorized a $7 billion repurchase of its Class C stock, pleasing investors who had been craving more after a $5 billion repurchase last year.

Google is competing fiercely with social network Facebook Inc for dominance in the fast-growing mobile advertising market. Google Chief Executive Sundar Pichai touted the company's gains in the space, and was bullish about recent product launches such as the Google Assistant, the Google Home smart speaker and refinements to the enterprise cloud business.

The products are aimed at the rise of voice search, which many analysts believe will succeed keyboards and touch screens as a primary way users interact with devices.

"We feel well positioned as we transition to a new era of computing," Pichai said in an conference call. "This new era is one in which people will experience computing more naturally and seamlessly in the context of their lives, powered by intelligent assistants and the cloud."

Shares of Alphabet, the world's No. 2 company by market value, were up 1.6 percent in after-hours trading.

The company posted third-quarter adjusted earnings per share of $9.06, beating expectations of $8.63 a share on revenues of $22.05 billion, according to Thomson Reuters I/B/E/S estimates.

Google has been dogged by concerns about how it would nudge its vast web advertising business toward mobile, but the company's recent performance has reassured Wall Street that the transition is well underway, said analyst Colin Gillis of BGC Partners.

"It’s showing that even though they've hit lifetime highs, there’s still room to run," he said.

Advertising revenue, the company's lifeblood, rose 18.1 percent to $19.82 billion in the third quarter. Paid clicks, or ads for which advertisers pay only when users click on them, rose 33 percent, compared with a rise of 29 percent in the second quarter.

Cost-per-click, or the average amount advertisers pay Google, fell 11 percent in the latest period, but investors are willing to forgive the slump, for now, as it suggests strong mobile growth, said analyst Kerry Rice of Needham & Co.

YouTube continued to post robust gains, Pichai said. Over the past year, Google, Facebook and Twitter Inc have all doubled down on video, a format where advertisers are willing to pay a premium for a few seconds of users' undivided attention.

Advertising accounted for 89.1 percent of Google's total revenue in the quarter, and analysts are eager for the company to tap new sources of growth.

One of the leading contenders is Google's cloud business, which drove a 38.8 percent rise in the company's "other revenue."

"As we head into 2017, I expect cloud to be one of our largest areas of investment," Pichai said.

A relatively late entrant to the cloud business, Google is trying to steal market share from industry leaders Amazon.com Inc and Microsoft Corp. Amazon on Thursday reported a 55 percent revenue increase in its cloud business.

"I would hesitate to say they are competing head-to-head, but they are making up for lost ground," Rice said.

Alphabet's "Other Bets" unit generated revenue of $197 million, primarily from Nest, Google Fiber and Verily units, Chief Financial Officer Ruth Porat said during the call.

Alphabet said this week it was pausing the rollout of Fiber, a high-speed internet service, in some U.S. cities and that its leader, Craig Barratt, would leave.

Porat played down analysts' concerns of instability at Other Bets, which has suffered a wave of executive departures, including Nest founder Tony Fadell, self-driving car technology chief Chris Urmson and, most recently, Barratt.

"As we reach for moonshots that will have a big impact in the longer term, it's inevitable that there will be course corrections along the way, and that some efforts will be more successful than others," Porat said.

Other Bets, which also includes research unit X, reported an operating loss of $865 million, down from a year-ago loss of $980 million. The narrowing loss suggests Porat is instilling the financial discipline investors have long hoped to see from the company, said Gillis.

"Everybody loves Ruth," he said.

Text by Reuters
 

Tags Cloud

20102011Absa Bankaccaaccidentaccidentsadministration volontaireADSUadvertisingafghanistanAfrAsiaafricaagalegaagreementagricultureagroAHRIMAIairair asiaair australAir Franceair madagascarair mauritiusairasiaAirlinesairportairway coffeeAlbionalgeriaalibabaalteoAlvaro SobrinhoamazonAmeenah Gurib-FakimAMLandroidangolaAnil BachooApollo Bramwellappappleappointmentsappsaquaculturearab townarrestArtArvin BoolellasiaATMATOauditaudit reportaustraliaaustriaaviationawardawardsAxcel ChenneyBABagatelleBagatelle DamBAIBalaclavaBangladeshbankBank OnebankingbanksBar CouncilbarclaysBDObeachbeachesBeau Bassin-Rose HillbeautybeerBelgiumBelle-MareBelle-RiveBet365betamaxbettingBharat Telecombig databitcoinblue economyBlue-BayBOIboko haramBollywoodBOMbombingbookbookmakerbooksbossBotswanabpmlBPOBramer BankbrazilbrexitBritish AirwaysbudgetbuildingbusesBusinessbusiness trendsCabinetcall centresCanadacanecareercareer tipscargocarnivalcasinoCaudanCCIDCCMCCTVCEBcelebretiescelebritiescementChagoscharityCharlie HebdoCHCchilechinachromeCIELcigarettesCim FinancecinemaclashesCMTcomoroscompetitionconcertconferenceConfinementCongoconstitutional amendmentconstructioncontestcontestscontractcooperationCoronaviruscorruptioncounterfeitcoupCourtCourtscouvre-feuCOVID-19CPBCPEcreativitycreditscreolecrisiscruise shipcruise shipsCSOCT PowerCultureCurepipecustomercustomerscustomsCVCWAcyclingcyclonedamDawood RawatdayDBMdeficitdenguedeportationdevelopmentDiego GarciadivalidoctorsdodoDomaine les PaillesDonald TrumpDPPdrug traffickingdrugsDTAADubaiDuty Freee-commercee-servicesearthquakeebeneebolaecoécolesecologyeconomicEconomic Development BoardeconomicseconomyEducationeducation abroadeducation reformEEZEgyptEIILMelectionelectionselectoral reformelectricityelon muskembassyEmiratesemirates airlinesEmtelenergyENLentrepreneurshipEnvironmentEOCEUEuroEuropeeventeventsexamexaminationexamsexpoexportfacebookfairFalcqfarmersfarmingfashionfast foodfbiFDIfeefeesferryfestivalFievre AphteuseFIFAFIFA World CupFilm Rebate SchemefilmingfilmsfinancefinancesfinancingFirefishfishingFIUFlacqFlic-en-FlacfloodFloodsflourfonction publiquefoodFootballforecastforeign workersForumFrancefraudfruitfruitsFSCFTAfuelfunnyGAARgabongadgetsgalaxygalaxy notegamblinggame of thronesgamesgasgazaGDPGermanyghanaGlobal BusinessgolfGoodlandsgoogleGorah Issac casegovernmentGRAGrand Baygrand-baieGrand-BassinGrand-Gaubegreecegreengreen energygrippeGTUH1N1hackershajjhamashappinessHawaiihawkershealthhealthcareHeritage Cityhi-techhigher educationhighlandshistoryHolcimholidaysHong Konghorse raceshorse racingHospitalhotelhotel businesshotelshowhow toHRHRDCHSBCHSCHSC ProhtchungaryhuntingHusein Abdool RahimIBAIBLICACICTICTAID cardiframacillegal fishingillegal migrationillegal workersIMFimportindiaIndian OceanIndian Ocean Island GamesIndonesiainflationinfluenzaInfographicsinfrastructureinnovationinnovationsinsuranceinterest rateinternetinterpolInterviewinterview tipsinvestinginvestmentinvestmentsIOCIORECiosiPadiphoneIPOiraniraqirelandIRSISISislamicisraelITItalyjapanJean-Claude Bastos de MoraisJellyfishJewelleryJin FeiJIOIjobjobsjockeyjournalismJulian AssangeKailash TrilochunKenyakitesurfingKPMGkreolla buttelabourLafargelandlandslideLarsen & ToubrolawlawslayoffsLe MorneleadershipleakLepeplexpressliberiaLibyalifeloanloanslocal governmentLockdownlogisticslondonlotteryLottotechLRTLufthansalycheeMadagascarmade in morisMahebourgmalariamalaysiamalaysia airlinesMaldivesMalimallmanagementmanagement tipsmanufacturingmarketmarketingmarketsMauBankMauritiansmauritiusMBCMCBMCCIMDFPMeatmeccamediaMedical CouncilMedical tourismmedicamentsmedicineMedineMedPointmeetingMEFMegh PillayMESMeteoMetro ExpressMEXAmexicoMFAMGIMHCmichaela harte caseMicrosoftMIDMidlandsMIEmigrationmigration crisisminimum salaryminimum wagemiss mauritiusmistakesMITDmlMMMmobilemobile phonesMokamoneymoney launderingmonkeyMont-ChoisyMoody’sMoroccomotivationmoviesMozambiqueMPAMPCMPCBMPLMQAMRAMSBMSCMSMMTMTCMTPAMusicMV BenitaNad SivaramenNaïadeNamibiaNandanee SoornackNarendra ModinasanatureNavin RamgoolamNavind KistnahNCBNCGNDUNECnefNegative Income TaxNelson MandelaNeotownNepalnetherlandsnetworkingNew Mauritius Hotelsnew zealandNGONHDCNICNICHLNigerianight clubsNitin Chinien caseNobel Prizenokianorth koreaNRBNTANTCNWCCNWECOCDEoceanocean economyofofficialsoffshoreoilOlympic GamesOmega ArkOmnicaneoniononlineopinionOppositionorangeoscaroscar pistoriusOUMoutsourcingPakistanpalestinePamplemoussesPanama Paperspandit sungkurParadise PapersparliamentPaul BérengerpensionpensionspeoplePereyberepermis de travailPhilippinesPhoenix Beveragesphonespicture of the daypillspiracyplageplagueplanPlanet Earth InstitutePMPMEPMOpmsdPNQpokerpolicepoliticspollutionPonzi SchemeportPort LouisPort-LouispostPovertyPPPPRPravind JugnauthPRBpresentationpresentation tipspresidentpricepricesprisonproblemprofitprojectprojectsprostitutionprotestspsacPSCpsychologyPTRpublic functionpublic servicepwcQatarQuantum Globalquatre-bornesquotesrainsRajindraparsad SeechurnRakesh GooljauryransomwareratesratingratingsRavi YerrigadooRDAreal estaterecallsreformreformsrefugeesreligionrentrepo ratereportRESRésidence Barklyrestaurantrestaurantsresultresultsresumeresume tipsretailReunionrevenuericeRiche-TerreriseRiviere-du-RempartRiviere-Noireroadsroche-boisRoches-Noires caseRodriguesRogersrose-belleRose-HillrosewoodRoshi BhadainRum and SugarRundheersing BheenickrupeeRussiaRwandasafetySAJsalariessalarysalesalessales tipssamsungsanctionssaudi arabiaSBIsbmSCscamscandalSCBGscholarshipscholarshipsSchoolschoolsscienceseasecuritySEMSEMDEXSenegalSeychellesShakeel MohamedShanghaisharksshootingshoppingshopping fiestashopping mallshopping mallsshowShowkutally SoodhunSICsicomSierra LeonesingaporeSITskillssmall businessSmall Planters Associationsmart citysmartphonesSMeSME MauritiusSMEDASMFsmmsnapchatSobrinho casesocialsocial mediasocial networks & messengersSofitelsoftwaresolar energySomaliasonysouthsouth africaSouth China Seasouth koreasouth sudanspainsponsorshipsportSportsSquatterssri lankaSSRStar KnitwearstartupsstatisticsstatsSTCstockstock marketstocksstrategystreet vendorsStressstrikestudystudy abroadstylesubventionsuccesssuccess storysugarsugar canesummitSun ResortsSun Tan caseSunkai caseSunnystarssupermarketssurveySwanSwedenSwitzerlandsyriaTAtabletsTaiwanTanzaniataxtax fraudtax heaventaxesTbillsteateacherTeachersteamTECtechnologytelecomtendertendersterrorismtertiarytextilethailandthethefttimetime managementtipstototaltourismtoystradetrade feetradingtrainingtrainingstransporttraveltrendsTrioletTripAdvisorTrou-aux-BichestsunamitunaTunisiaTurfTurkeyturkish airlinesTVtwittertyphoonUdMUgandaukukraineununemploymentUNESCOunionsuniverseuniversityuomUSUTMvacanciesvacancyVacoasVacoas Popular Multipurpose Cooperative SocietyVacoas-PhoenixVanilla Islandsvarma caseVATVeekram BhunjunvegetablesVerizonvideoVideo of the Dayvirtual realityvisaVishnu Lutchmeenaraidoovisitvivo energyvolcanowasteWaterWaterparkWeatherwest africawhatsappWhitedot Casewi-fiwikileakswindowsWMAwomenworkwork abroadworkersWorkshopWorldWorld Bankwriting tipsWTOXavier-Luc DuvalyahooYasin DenmamodeyemenYEPYerrigadoogateyoutubeZambiazimbabwe
Mauritius
© 2010-2020 mega.mu