Google Parent Company Alphabet Reports Poor Revenue, Weak Earnings

Google’s parent company Alphabet reported weaker-than-expected earnings and revenue for the first quarter this week, with YouTube showing particularly weak results.

CNBC reports that Alphabet, Google’s parent company, reported significantly weaker earnings and revenue for the first quarter this week with stock dropping by around 3 percent in extended trading. CNBC summarized the earnings report which can be seen below:

Earnings per share (EPS): $24.62 per share, vs. $25.91 expected, according to Refinitiv

Revenue: $68.01 billion, vs. $68.11 billion expected, according to Refinitiv
YouTube advertising revenue: $6.87 billion vs. $7.51 billion expected, according to StreetAccount
Google Cloud revenue: $5.82 billion vs. $5.76 billion expected, according to StreetAccount
Traffic acquisition costs (TAC): $11.99 billion vs. $11.69 billion expected, according to StreetAccount

Google reported revenue of $68.01 billion, representing growth of 23 percent from the same period last year. However, this was a slowdown from the 34 percent growth it saw in the first quarter of 2021.

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YouTube CEO Susan Wojcicki (AP Photo/Reed Saxon, File)

Google further reported $54.66 billion in advertising revenue for the quarter, an increase from $44.68 billion last year. YouTube ad revenue fell short of analyst expectations following impressive growth during the pandemic when users were primarily at home and spending more time online.

CFO Ruth Porat said that YouTube experienced “modest growth,” primarily in direct response ads. Porat noted that the poorer results are highlighted due to a tough comparison to an extremely strong first quarter in 2021.

Google’s cloud business saw impressive growth of 44 percent, beating estimates are more companies shift workloads away from private data centers, but the division is still losing Google money and operating on a loss of $931 million compared to $974 million last year.