Alphabet Quarterly Results Underwhelm Investors

Posted on April 29, 2019 by Paul Thurrott in Google with 6 Comments

Image credit: Wikipedia

Alphabet—Google’s parent company—delivered net income of $6.66 billion on revenues of $36.3 billion for the quarter ending March 31. But the results were underwhelming to investors, and they were further burdened by an EU antitrust fine of almost $1.7 billion.

“We delivered robust growth led by mobile search, YouTube, and Cloud, with Alphabet revenues of $36.3 billion, up 17 percent versus last year,” Alphabet Chief Financial Officer Ruth Porat said. “We remain focused on, and excited by, the significant growth opportunities across our businesses.”

The issue for Alphabet, of course, is that its non-Google businesses are just that: Opportunities. And all of them continue losing money: Alphabet reported that its “other bets” delivered a quarterly operating loss of $868 million on revenues of just $170 million.

Google, of course, is going strong: Its advertising business generated $30.7 billion in revenues in the quarter, up from $26.6 billion a year ago. Advertising accounted for 84.5 percent of Google’s revenues. A year ago, it was 85.5 percent. Google is the world’s biggest seller of online ads and it accounts for one of every three ads viewed online.

And while it isn’t a big business for Google, the firm did mention that its smartphone operations encountered “year over year headwinds,” meaning that it sold fewer handsets than it had in the year-ago quarter. The firm expressed hope that future innovations, like 5G and folding handsets, would jumpstart sales in the future. And it pointed to the success of Google Assistant-enabled smart home devices.

“We see strong momentum,” Google CEO Sundar Pichai said.

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Comments (6)

6 responses to “Alphabet Quarterly Results Underwhelm Investors”

  1. Avatar

    dcdevito

    I wonder how much Amazon is eating into their ad empire. Not to mention ad revenue is gained through content, not so much by clicks and words/text. And Google has already been unable to properly monetize YouTube content. Cracks are indeed starting to show.


    While I feel it’s the software of any device that makes the difference, it’s hard justifying high end prices for devices that have great software but midrange hardware. Google got greedy and they’re learning the hard way. The Nexus line was gaining steam then they decided they wanted to be Apple. Looks like it isn’t working out, not for phones, laptops and especially tablets. They need to get back into the unlocked midrange market quick before it’s too late.

    Even Apple is learning the same lesson with the XR. Great devices and experiences can be had with reasonable prices.

    Worse still...Q1 revenue was $36.3B, roughly $1B short of forecasts. And there only way you grow is to beat forecasts. The result?

    Shares dropped 7% which equates to roughly $60B in market cap.

    It’s time for Google to turn up the data collection on phones ASAP.

  2. Avatar

    PeterC

    The USA - China trade and security “ding dong” will not play out well for google, android or google services. A resurgent Microsoft is starting to camp out in what google sees as its territory. Apple whilst expensive still do better hardware software integration and are also protecting its users base through developing services and are already moving out of China to India. Legal anti trust and anti competition cases will mount for google as will copyright/platform legal cases.


    The list could go on and on..... they will fight on every front, but they can’t win on every front.


    Its hilarious but but after all these tech years and billions of investor cash thrown at the wall by all of the companies to become dominant...... Microsoft will remain the windows and office company, google the search and services company, Apple remains its own software hardware design company etc etc etc.


    Buy hey, they’ve all built fancy pants offices around the world and wear trendy trainers. Winning!

  3. Avatar

    Stooks

    Google is a one trick pony when it comes to revenue. (AD sales)


    Their other products are nothing but tools to gather information to feed the AD business.


    I use YouTube with ad blockers and Maps on my iPhone.

  4. Avatar

    mefree

    Wow, Microsoft trounced them hard this quarter.

  5. Avatar

    dontbe evil

    bauhauahuauahauauahua

  6. Avatar

    locust infested orchard inc

    Quote by Paul Thurrott, "Google is the world's biggest..."


    ...data gobbler.

    .


    Quote by Paul Thurrott, "'We delivered robust growth led by mobile search, YouTube, and Cloud, with Alphabet revenues...up 17% versus last year,' Alphabet CFO Ruth Porat said."


    Reading between the lines, Alphabet's CFO, Ruth Porat in layman's terms actually means, 'Alphabet delivered robust growth by the frenetic and aggressive pace of our data siphoning through our users' usage of our services, unbeknownst to them'.

    .


    Quote by Paul Thurrott, "'We see strong momentum,' Google CEO Sundar Pichai said."


    Evidently referring to the momentum in the pace of Google's voracious appetite for users' data.

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