Google Parent Company Shares Drop After Quarterly Earnings
Alphabet owns Google, where advertising revenue rose to $27.2 billion in the quarter, up from $22.4 billion a year ago.
Shares of Alphabet were dropping 4 percent after the closing bell on Thursday after the parent of Google reported a quarterly loss due to a nearly $10 billion one-time tax charge.
Alphabet was expected to earn about $9.98 per share on revenue of $31.86 billion in the fourth quarter. It beat on revenue, posting $32.3 billion, but even without the tax charge it would have fallen about 28 cents short of earnings expectations on a per-share basis.
For the entire year, Alphabet posted $110.9 billion in revenue, marking the first time that the tech giant exceeded $100 billion in annual sales.
Google makes up the bulk of Alphabet, and its revenue jumped to $31.9 billion in the fourth quarter, up from $25.8 billion last year. Alphabet's non-Google revenue, which it labels "other bets," rose to $409 million from $262 million a year ago.
Separately on Thursday, Alphabet said John Hennessy, the former president of Stanford University, would be the chairman of the board, taking over from Eric Schmidt, who said in December he would step down. Schmidt is remaining as technical advisor at Alphabet.
Investors typically pay strict attention to Google's numbers rather than the parent company's, and usually are especially interested in advertising revenue, which rose to $27.2 billion in the quarter, up from $22.4 billion a year ago.
Recently, some large companies pulled ads from YouTube in part due to objectionable content on the platform. Google CEO Sundar Pichai didn't say Thursday whether video ad revenue took a hit during the quarter, but he said YouTube is taking a "comprehensive approach," including artificial intelligence, to ensure video meets a certain standard before ads are attached.