May 17, 2022

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Google shares dip as first-quarter profit misses as YouTube growth disappoints

Google shares dip as first-quarter profit misses as YouTube growth disappoints

Google Father the alphabet (The Google) announced earnings and revenue for the March quarter did not meet Wall Street targets. GOOGL stock fell as YouTube ad growth fell short of expectations amid increased competition with TikTok.




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After the market closed Tuesday, Alphabet said first-quarter earnings fell 6% to $24.62 per share. Google posted a loss of $1.07 billion on equity investments, reducing profit by 99 cents per share.

The company reports earnings under generally accepted accounting principles, also known as GAAP.

Total revenue also rose 23% to $68.01 billion. Analysts had expected Google earnings of $25.74 per share and revenue of $68.05 billion.

BMO said: “We think the revenue results were pretty good (a little bit outperforming search, same for the cloud), but not enough to allay growing investor concern about stagnating ads, nor growing competition fears on TikTok after YouTube missed out again and by a larger margin. from the previous”. Financial market analyst Daniel Salmon in a report.

GOOGL stock fell 3.3% to nearly 2,295.42 in morning trading in stock market today.

Google Stock: YouTube Revenue Misses Esttimes

Meanwhile, YouTube ad revenue rose 14% to $6.87 billion. Also, analysts have estimated YouTube ad revenue at $7.21 billion.

The growth of ads for social media company TikTok via short videos has boomed. Analysts say this is a headwind for YouTube’s growth.

At Jefferies, analyst Brent Thill said in a report: “YouTube missed the street by 8%, after skipping in the fourth and third quarters. The 14% year-over-year growth was the lowest since the pandemic.”

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He added, “Negative factors included slowing growth in direct response advertising, continued impact from Apple iOS 14 changes, suspension of operations in Russia, and slowing of brand advertising in Europe after the start of the Ukraine war.”

Google said cloud computing revenue rose 44% to $5.82 billion, topping estimates of $5.73 billion.

The company said net revenue, less traffic acquisition costs, was $56.02 billion, versus an estimate of $56.26 billion. Traffic acquisition costs – what Google pays to direct traffic to its websites – jumped 23% to $11.99 billion. That exceeded estimates of $11.69 billion.

The company said Google’s board of directors authorized an additional $70 billion worth of stock buybacks.

Google share 17% this year

In the first quarter, the company repurchased $13.3 billion of Google stock for $13.5 billion in the December quarter and $12.6 billion in the September quarter.

“We continue to make deliberate investments in capital expenditures, research and development, and talent to support long-term value creation for all stakeholders,” Alphabet Chief Financial Officer Ruth Porat said in the earnings statement.

As Google’s earnings report approaches, the stock is down 17% in 2022 amid volatility in the Nasdaq. holding a google arrow Rated relative strength out of 57 of the 99 possible best, according to IBD stock check.

If you are new to IBD, consider taking a look at stock trading system And CAN SLIM Basics. Distinguish chart patterns For issues like GOOGL stock is one key to investment guidance.

Follow Reinhardt Krause on Twitter Tweet embed For updates on 5G wireless networks, artificial intelligence, cyber security and cloud computing.

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