Google Parent Company Shares Plunge After Poor Quarterly Results

Getty Images
Alphabet CEO Larry Page

The rest of Alphabet managed only $166 million in revenue and lost $802 million.

Shares of Alphabet were plunging 7 percent in after-hours trading on Thursday after the parent company of Google posted quarterly financial results that didn't wow investors.

Alphabet posted earnings of $7.50 per share after adjusting for expenses related to stock options, but Wall Street analysts were looking for $7.90 per share.

Revenue for the quarter increased 17 percent year-over-year to $20.3 billion, or $16.47 billion once traffic-acquisition costs were stripped out. On that basis, Wall Street was predicting $16.51 billion.

Google made up the lion's share of the revenue and profit at Alphabet, accounting for $20.1 billion in sales and $6.3 billion in operating income during the first quarter.

The rest of Alphabet managed only $166 million in revenue and lost $802 million.

Advertising revenue for Google rose 16 percent to $18 billion, while all other revenue at Google was up 24 percent to $2.1 billion.

Paid clicks on Google websites rose 38 percent, while paid clicks for "Google Network Members" rose 2 percent.

Shares of Alphabet closed 1 percent higher on Thursday to $759.14, but were sinking by about $35 per share after the closing bell.

On Thursday, Alphabet's market capitalization was $522.5 billion, making it the second most valuable company on Wall Street, after Apple, which sported a market cap of $587.6 billion.

On a conference call with analysts, Goolge CEO Sundar Pichai said the company continues to "invest heavily" in YouTube, and that YouTube mobile reaches more 18-49 year olds than any TV network. He  also boasted of Google's live, 360-degree video of the Coachella music festival.

Pichai also said that YouTube Red, the premium subscription video service, "has been very well received." He added: "We're working on a lot more original content throughout the year."

comments powered by Disqus