Alphabet quarterly results fell short of Wall Street expectations

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Holding Alphabet, which owns Google, announced the financial results for the first quarter of 2019.

In the reporting period, the company’s revenues amounted to $ 36.4 billion, showing an increase of 17% compared with year to year. Earnings after deduction of the European Commission’s fine in the Google AdSense case was equal to $ 6.657 billion. Due to a $ 1.7 billion fine, this figure fell by 41% in annual comparison. Without these payments, profits would have been $ 8.3 billion.

Meanwhile, Wall Street analysts expected revenues at the level of $ 37.33 billion. After the publication of the financial report, the value of Alphabet shares at the post-exchange trades fell by 7.34%.


Google’s quarterly revenue was $ 36.17 billion, up 16.7% from a year earlier. Advertising revenue reached $ 30.72 billion, and operating profit – $ 9.325 billion.

The main drivers of revenue growth were mobile search and YouTube. During the conference call for the quarter, Google CEO Sundar Pichai also said that more than 70% of the company’s advertisers use AI-based advertising products.

The volume of paid clicks on Google resources increased by 39% in annual comparison, but decreased by 9% in quarterly. This decline in the company was associated with slower growth in advertising clicks on YouTube.

Compared to the previous year, the price per click fell by 9%, and compared to the fourth quarter of 2018, it increased by 5%.

The cost of traffic acquisition (TAC) was $ 6.86 billion (22% of advertising revenue). At the same time, analysts expected TAC at $ 7.26 billion.

Other Bets (non-core areas)

Revenues for this segment amounted to $ 170 million, a net loss of $ 868 million. Revenues were mainly generated by two divisions: Google Fiber and Verily Life Sciences, a project on providing high-speed Internet access .

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