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Alphabet Inc. (GOOGL) shares fell more than 3.4% after hours on Thursday, after Google's parent company reported earnings of $ 13.06 per share for revenue $ 33.7 billion.
Analysts expected the company to report earnings of $ 10.41 per share in the third quarter for revenue of $ 34.04 billion. Following the earnings report, equities slipped in late trading as investors digested earnings.
Advertising remains Alphabet's main cash cow, advertising revenue generated by Google platforms accounting for about 70% of net revenue in recent years, with annual growth of about 20%. In the third quarter, Google's advertising revenue totaled $ 28.95 billion. Alphabet and Google's Chief Financial Officer Ruth Porat said in their earnings report that "mobile search and our many products help billions of people every day."
According to FactSet, Google 's Alphabet business accounted for 98.9% of the business' s business figure in 2017.
Apart from Google's advertising and revenue, Alphabet also faces data privacy issues that have cost the company a $ 5.07 billion fine from the European Union to which it has charged fees. in the second quarter. The company appealed the decision, despite the assumption of responsibility. In the United States, Google CEO Sundar Pichai is scheduled to testify before the Congress on data protection and related issues.
During a telephone conversation with investors on Thursday, analysts questioned Pichai and Porat on various initiatives, ranging from the marketing of Waymo, his driverless automotive unit, to Verily, his life sciences unit, passing through its commercial activities in China.
Alphabet includes projects such as Waymo and Verily, which are not directly related to its main advertising business, in a segment called "Other Bets". These bets are only a small part of Alphabet's overall revenue of $ 146 million for the quarter, but Waymo in particular has sparked interest in its potential business value.
Porat said that Google has entered the "early days" of marketing Waymo with projects like an early pilot program and exploring B2B technology applications, such as licensing for deliveries or other cases of use of logistics.
In Google's Chinese market, including a controversial Google search engine censored project for the Chinese market, Pichai remained largely silent on the details, but said "we are constantly looking for ways to better serve Chinese users ". While the large Chinese market offers Alphabet a potentially considerable opportunity to expand Google's search and advertising activities, it is also a difficult market given the well-developed competitive field of the research.
Alphabet stocks performed well this year, peaking at $ 1,252.89 in July following the release of its previous results.
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