Alphabet's Google Blows By Expectations in Third Quarter
Shares of the company soared 12 percent after the closing bell.
In its first earnings report since reorganizing under the name Alphabet, online search giant Google said Thursday it earned an adjusted $7.35 per share on $18.7 billion in revenue, surpassing the expectations of analysts on both the top and bottom lines.
Analysts were expecting only $18.5 billion in revenue and earnings of $7.21 per share. A year earlier, Google earned $6.35 per share in the third quarter on revenue of $13.1 billion.
Shares of Alphabet rose 1.4 percent to $651.79 during regular trading on Thursday but soared more than 12 percent after the closing bell once Wall Street got a look at the numbers.
Google said that the average price it got for ads fell 16 percent per click compared with last year, though the number of paid clicks jumped 23 percent.
Thursday's report will mark the final time Google's financials are aggregated under its traditional model, as the company last month was reorganized into Alphabet to be run by CEO Larry Page and president Sergey Brin while Google is run by Sundar Pichai, promoted to CEO of the online company.
Going forward, Alphabet will be the holding company that houses Google, which is made up of the Internet assets, including search and YouTube. Alphabet also houses initiatives like Life Sciences, Calico and X lab, so the money lost (or eventually made) by those companies will no longer be included in Google's financial reports.
Alphabet's earnings announcement comes a day after Google said that next week it will launch YouTube Red, a subscription service featuring music and video free of ads.