Google parent beats Q4 estimates, stock still drops

Google parent beats Q4 estimates, stock still drops

Alphabet, the parent company of Google, said its total revenue for the final three months of 2018 was $39.3 billion, an increase of 22% from the same period a year earlier, according to a company earnings report released Monday.

At this point, all of the major tech companies have reported their earnings, and Google, Apple, Amazon and Microsoft are all within a few tens of billions of dollars or less of each other's market cap, making market watching a much more interesting practice than in recent years, when only Apple dominated.

Ruth Porat, CFO of Alphabet and Google did not provide any guidance for 2019 and simply said that the company will “continue to make focused investments in the talent and infrastructure needed to bring exceptional products and experiences to users, advertisers, and partners around the globe.”. The company's net income for the most recent quarter was $8.9 billion.

Google's "other" revenue - about $6.48 billion - includes money from cloud partnerships, Nest, Google Play and more.

Alphabet's Google search engine is the digital world's most lucrative advertising business, and it was slapped with a $57 million fine last month by French authorities.

Alphabet's head count grew to almost 99,000 from 80,000 employees during the course of the year as expenses at the internet colossus climbed.

The category accounted for $154 million in revenue for the quarter, up from $131 million a year ago.

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Before the results were released the company's share price had rallied after stumbling along with its peers previous year.

Alphabet said its Q4 results slightly surpassed analyst expectations. The revenue mainly comes from Google Fiber, a high-speed internet service, and Verily, a life sciences division, Porat said on the call. Baird analyst Colin Sebastian, quoted by CNBC, said he expects a "meaningful acquisition" to "enhance enterprise sales/support functions and SaaS capabilities", given that Alphabet's $109 billion cash hoard allows Google Cloud to "go elephant hunting".

Cost per click, which somewhat measures the amount Alphabet charges advertisers for each ad served on its web sites, plummeted 29 percent from 2017 and 9 percent from Q3.

After peaking in July, Google shares have fallen back to just above where they were trading early past year.

One of the biggest challenges, it seems, that Alphabet faces is the battle to dominate cloud storage and services.

Ad revenue growth, as always, will be paramount to investors, while the company's "Other Bets" segment is expected to rise by more than a third. Losses, however, doubled on the year-ago quarter, checking in at $1.32bn.

The rise of the Faangs helped propel stock markets to new highs and their stumble helped to drag down indices across the world a year ago.