Alphabet beats Wall
Street expectations with Q1 earnings but sees ‘significant’ slowdown in ad
revenue (GOOG, GOOGL)
Google parent
Alphabet (GOOG, GOOGL) reported its Q1 earnings on Tuesday, beating analysts’
expectations on revenue despite the ongoing coronavirus pandemic, and a
slowdown in ad revenue in March.
These are the most
important numbers from the report, and what analysts were expecting from the
company, as compiled by Bloomberg.
Revenue ex-TAC:
$33.71 billion versus $32.6 billion expected
Earnings per share:
$9.87 versus $10.36 expected
Alphabet’s stock was
up more than 4% in after-hours trading.
Unlike other tech
companies like Apple, Alphabet never pulled its quarterly guidance — though
there have been indications that the firm is undertaking cost-cutting measures.
Taken together, the firm said revenue before traffic acquisition costs (TAC),
was up 13% year-over-year thanks to its search, YouTube, and cloud businesses.
A drop in Google ad
sales steadied in April and some consumers returned to using the search engine
for shopping in addition to finding novel coronavirus information, parent
Alphabet Inc said on Tuesday, sparking an 8% rally in shares.
The share rally to
$1,329.81 after hours brought the stock almost back to where it started the
year.
Some financial and
advertising analysts had estimated ad sales declines of up to 20% in the coming
quarters, with hotels, airlines, film studios and other big spenders cutting ad
buy because of the coronavirus pandemic.
But Alphabet said
search ads, its most lucrative business, saw revenue decline by a mid-teens
percentage in late March compared with a year earlier and that the slowdown did
not worsen this month.
The company also is
working to lure money from advertisers that normally sponsor sporting events
canceled by the coronavirus.
“While, obviously,
there’s an impact on the economy and we’re not immune to that, the engagement
from advertisers across our products and with our teams has been very robust,”
Alphabet Chief Executive Sundar Pichai told analysts on Tuesday.
Alphabet Chief
Financial Officer Ruth Porat still warned that she anticipated “the second
quarter will be a difficult one” because the early April trends may not hold.
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