Alphabet Inc (NASDAQ: GOOG), the parent company of the internet content giant Google, reported its second quarter financial results after markets closed on Thursday, July 25. The company surpassed Wall Street estimates, with net income tripling from a year earlier.
Net income came in at $9.95 billion during the quarter, helped by a $2.7 billion gain from investments, while companywide revenue rose 19% year-over-year. Alphabet’s board of directors approved a stock buyback of $25 billion.
Shares the company gained $85.87, or 7.58% to trade at $1,217.99 in after-hours trade, following the report. The stock has rallied more than 9% since the beginning of the year.
GOOG Earnings & Outlook
Alphabet posted second-quarter net income of $9.95 billion, or $14.21 per share, compared with the second quarter of the previous year when the company reported net income of $3.2 billion, or $4.54 per share. Analysts had been expecting adjusted earnings of $11.30 per share in the quarter.
Revenue stood at $38.94 billion during the quarter, up 19.3% from the same period last year. Analysts expect the company to report revenue of $38.15 billion, according to data compiled by Refinitiv.
Alphabet generated revenue of $32.60 billion from advertising in the quarter, up from $28.09 billion in the earlier-year period. Revenue from the company’s Other division, which includes cloud and Pixel smartphones, was $6.18 billion, compared with the same period last year when the company generated revenue of $4.43 billion in the segment.
Alphabet CEO Comments
“Our effort to build a more helpful Google for everyone brings countless opportunities to help users, partners, and enterprise customers every day,” said Sundar Pichai, Chief Executive Officer of Google.
“From improvements in core information products such as Search, Maps, and the Google Assistant, to new breakthroughs in AI and our growing Cloud and Hardware offerings, I’m incredibly excited by the momentum across Google’s businesses and the innovation that is fueling our growth,” Pichai added.
Alphabet Inc Profile
Alphabet is a holding company, with Google, the Internet media giant, as a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads.
Google’s other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart homes products, which include Nest and Google Home, also contribute to other revenue.
Alphabet’s moonshot investments are in its other bets segment, where it bets on technology to enhance health (Verily), faster Internet access to homes (Google Fiber), self-driving cars (Waymo), and more. Alphabet’s operating margin has been 25%-30%, with Google at 30% and other bets operating at a loss. – Warrior Trading News
