Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Menu
Search
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Applications
    • Applications

    Google Parent Alphabet Surprises With Better Than Expected Earnings

    By
    Jaikumar Vijayan
    -
    July 29, 2016
    Share
    Facebook
    Twitter
    Linkedin
      Alphabet

      Google parent Alphabet’s stock soared up by over 6 percent late Thursday afternoon on news of a better than expected performance from the company for the second quarter of 2016 ended June 30.

      Alphabet announced earnings per share of $8.42 on revenues of $21.5 billion last quarter. The numbers handily beat Wall Street expectations of $8.04 a share on revenues of $20.76 billion. Second-quarter 2016 revenues represented a 21 percent increase over the same period last year. Net income for the quarter at $4.88 billion was 28 percent higher on a year-over-year basis.

      In a statement, Ruth Porat, chief financial officer at Alphabet, attributed the strong results to investments the company has made over the years in areas such as video and mobile. “We continue to invest responsibly in support of our many compelling opportunities,” Porat said.

      Much of the revenues and growth predictably came from Google’s advertising business. Total revenues from advertising jumped 19 percent from just over $16 billion in the same quarter last year to $19.1 billion in the last quarter. Of that, $15.4 billion came from advertisements served on Google websites including Search, Maps, YouTube and Finance. The remaining $3.7 billion came from advertisements served through Google’s Network Members including AdSense and DoubleClick.

      Paid clicks on Google websites jumped nearly 40 percent year over year, but fell 3 percent on Network Members websites compared with the same period last year.

      This is the second quarter that Google has broken out revenues for its various other ventures—collectively referred to as “other bets”—like its autonomous car initiative, Google Fiber, Calico and Google X. The numbers reveal that while revenues from these ventures increased from $74 million one year ago to $185 million, losses did so as well, from $660 million to $859 million in the second quarter of 2016.

      This is the first time in more than 10 quarters that Google’s revenues and earnings per share have come in higher than market expectations. The news sent the company’s stock up well over 6 percent at one point Thursday evening before settling back to around $801, representing a gain of 4.7 percent over the closing price for the day.

      “Overall, Alphabet’s results don’t raise a lot of red flags,” said Charles King, principal analyst at Pund-IT. While ad revenues were predictably the primary driver of revenue growth, the results show that Google’s efforts to bolster mobile and video ads are paying off. “That’s great news for shareholders, especially following Facebook’s mobile ad success.”

      King downplayed Google’s losses with its other bets ventures. “These kinds of high risk, high return ventures are bound to have up quarters and down,” considering their moonshot nature, he said.

      Facebook’s strong results and now Google’s better than expected performance signal strong growth in revenues from mobile advertising, added Ezra Gottheil, an analyst with Technology Business Research.

      One more positive sign is the healthy growth in revenues from non-advertising-related businesses at Google such as the company’s business cloud services, applications and Google Play. “This helps Google grow revenue even as the advertising market matures,” Gottheil said.

      At the same time, the results also reflect some tighter cost controls. For example, both operational expenses and capital expenses as a percentage of revenue were down last quarter, he said.

      Jaikumar Vijayan
      Vijayan is an award-winning independent journalist and tech content creation specialist covering data security and privacy, business intelligence, big data and data analytics.

      MOST POPULAR ARTICLES

      Android

      Samsung Galaxy XCover Pro: Durability for Tough...

      Chris Preimesberger - December 5, 2020 0
      Have you ever dropped your phone, winced and felt the pain as it hit the sidewalk? Either the screen splintered like a windshield being...
      Read more
      Cloud

      Why Data Security Will Face Even Harsher...

      Chris Preimesberger - December 1, 2020 0
      Who would know more about details of the hacking process than an actual former career hacker? And who wants to understand all they can...
      Read more
      Cybersecurity

      How Veritas Is Shining a Light Into...

      eWEEK EDITORS - September 25, 2020 0
      Protecting data has always been one of the most important tasks in all of IT, yet as more companies become data companies at the...
      Read more
      Big Data and Analytics

      How NVIDIA A100 Station Brings Data Center...

      Zeus Kerravala - November 18, 2020 0
      There’s little debate that graphics processor unit manufacturer NVIDIA is the de facto standard when it comes to providing silicon to power machine learning...
      Read more
      Apple

      Why iPhone 12 Pro Makes Sense for...

      Wayne Rash - November 26, 2020 0
      If you’ve been watching the Apple commercials for the past three weeks, you already know what the company thinks will happen if you buy...
      Read more

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×