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The search-engine giant
dominant in global digital advertising, reported net income of $18.94 billion, or $27.99 a share, in its fiscal third quarter, compared with net income of $11.25 billion, or $16.40 a share, in the same quarter last year.
Revenue after removing traffic-acquisition costs ($11.5 billion) increased to $53.62 billion from $37.97 billion in the year-ago period. Overall revenue was $65.1 billion, up 41%. Analysts surveyed by FactSet had estimated net income of $23.73 a share, on ex-TAC revenue of $52.3 billion.
Significantly, Alphabet’s operating margin improved to 32% in the quarter, vs. 24% in the same quarter a year ago.
“Five years ago, I laid out our vision to become an [artificial intelligence]-first company. This quarter’s results show how our investments there are enabling us to build more helpful products for people and our partners. Ongoing improvements to Search, and the new Pixel 6, are great examples,” Alphabet Chief Executive Sundar Pichai said in a statement announcing the results.
Google’s resilient results offered reassurance following earnings warnings from Facebook Inc.
and Snap Inc.
in recent days. Both companies blamed lower ad revenue on restrictive new mobile privacy-policy changes imposed by Apple this year. Alphabet Chief Financial Officer Ruth Porat referred to its impact as “modest” on YouTube revenue for direct responses during a conference call with analysts late Tuesday.
Google’s total advertising rose 43% to $53.1 billion. Search comprised $37.9 billion, up from $26.3 billion a year ago. YouTube ad sales continued to outperform, jumping to $7.2 billion from $5 billion a year ago.
Google remains “almost completely immune” to Apple’s change because of Google search’s intent-based buying model, which accounts for 63% of ad revenue, Forrester analyst Collin Colburn told MarketWatch. “[Google] definitely has a deep focus on its cloud and other bets to help diversify business, but advertising still wins and Google is still top dog with significant control over data deprecation.”
Still, the results got a ho-hum reaction in after-hours trading. Google’s stock was down 1% late Tuesday, though shares are up 59% so far this year. The broader S&P 500 index
is up 22% in 2021.
This artical is first shown on marketwatchAuthor on date 2021-10-26 22:44:00
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