Alphabet Inc. shares are down 5% post earnings, after missing on top and bottom lines + big miss on YouTube revenues
Alphabet stock slid Tuesday after first quarter earnings for Google’s parent company came in below analyst expectations, with YouTube experiencing a sharp slowdown in advertising sales following a rapid expansion during the pandemic. The company’s core business remains strong, with overall advertising revenue growing about 22% to $54.66 billion. But ad revenue from YouTube grew by only 14% — for below the 49% growth in the same period last year — a result of increased competition from TikTok and of users spending less time on their devices than earlier in the pandemic.
- Alphabet’s net profit for the quarter dropped 8% from a year ago, to $16.44 billion.
- The company’s board has authorized $70 billion in share buybacks; Alphabet has repurchased about $81 billion in shares over the past two years.
Key Highlights
*Earnings per share (EPS): $24.62 vs. Exp. $25.91
*Revenue: $68.01bn, vs. Exp. $68.11bn
*YouTube advertising revenue: $6.87bn vs. Exp. $7.51bn
*Google Cloud revenue: $5.82bn vs. Exp. $5.76bn
*Traffic acquisition costs (TAC): $11.99bn vs. Exp. $11.69bn
*Company to buy back an additional $70bn in Class A & C shares
According Anthony Cheung Alphabet stock is falling because the analysts that made predictions focus on the negative. The world was opening up and people are out living their lives and spending less time on the internet. Alphabet profits still grew just not as much as they would have if we were still in lockdown.
YouTube’s subscription (YouTube TV, YouTube music and YouTube Premium) continue to deliver substantial revenue as these subscriptions continue to grow. Number of subscribers is growing unlike Netflix that is losing paying subs.
YouTube Shorts now averages over 30 billion daily views, up from 6.5 billion a year ago. The drop in the stock price only shows that analysts are a out of touch and focus too often on the negative and no one could have predicted how insane Putin is and that he would attack Ukraine which affects the entire world economy and Europe’s ad spend. Things will get better though because there are more people with a positive outlook and who strive to make the world a better place.
