Google parent Alphabet posts 26pc increase in profits on mobile, video ads

By : |October 29, 2016 0

Google parent Alphabet topped analysts’ estimates for third-quarter profit and revenue to post earnings of $9.06 per share, adjusted and a revenue of $22.45 billion. Wall Street was looking for earnings of $8.64 per share on revenue of $22.05 billion.

This is a 20 percent surge in revenues when compared to $18.68 billion in the same quarter last year. “We had a great third quarter, with 20 percent revenue growth year on year, and 23 percent on a constant currency basis. Mobile search and video are powering our core advertising business and we’re excited about the progress of newer businesses in Google and Other Bets,” said Ruth Porat, CFO of Alphabet.

The company also reported a GAAP operating income(or profit) of $5.7 billion, which rose 26 percent year-on-year. Google has recently been dogged by concerns about how it would push its vast web advertising business towards mobile, but the company’s recent performance is pretty reassuring for Wall Street analysts.

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Though Google’s cost-per-click, a key metric determining the value of an ad, fell another 11 percent year-over-year this quarter, aggregate paid clicks increased 33 percent in the third quarter year-over-year, showing it’s still able to compensate for that decrease.

Advertising revenue, the company’s lifeblood, rose 18.1 percent to $19.82 billion while the Google’s websites saw sales increase 23 percent to $16.09 billion in the third quarter.

Google also detailed the revenue and loss figures for its other bets — the companies which are not a part of the core business. These would include everything from smart thermostat Nest, high-speed internet service Fiber, and health care company Verily. With regard to same, the company posted revenues of $197 million and losses of 865 million as compared to $141 million and $980 million last year.

Towards the end of the earning report, 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.

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