Google's Parent Company Beats First-Quarter Expectations, Shares Jump
Alphabet, led by president Sergey Brin, blew past Wall Street estimates on earnings and revenue as ads boom on mobile and YouTube.
Alphabet, the parent company of Google, blew past analyst expectations for its first-quarter earnings and revenue as ads surged on mobile and YouTube, the company reported Thursday.
Alphabet said it earned $7.73 per share, well up on an expected per-share profit of $7.39, and crushed the bottom line with overall revenues of $24.75 billion against a Wall Street expectation of $24.22 billion.
Net income was $5.43 billion against a year-earlier $4.21 billion. Google advertising revenues were $21.4 billion, compared to a year-earlier $18 billion.
During the first quarter of 2016, Google earned $6.02 per share in the first quarter on revenue of $20.2 billion. Stock in Alphabet surged 4 percent in after-hours trading to $930.05 on the strength of the earnings and revenue beats.
During an analysts call on Thursday, Google CEO Sundar Pichai told investors YouTube has seen "extraordinary growth and opportunities," even as the company didn't break out specific revenue figures for the online video platform. And CFO Ruth Porat underlined how ad growth at Alphabet during the latest financial quarter was driven by mobile search, YouTube and automated ad platforms.
Pichai also talked to analysts about a recent advertiser boycott over ad placement alongside offensive content on YouTube. "The feedback from our partners is very positive, and we're evolving overall to a better place," he said of industry consultations.
AT&T and Verizon and other advertisers recently pulled campaigns after their ads appeared besides videos promoting terrorism and homophobia. Google depends heavily on automated programs to place ads in YouTube videos, given the immense traffic of new video posted to the digital platform.
Regarding the new YouTube TV service, Pichai said the live TV offering has only launched and his company is focusing first on improving the "consumer experience," while also seeing room to bolster TV ad delivery. For $35 a month, YouTube TV offers subscribers access to live TV programming from more than 50 networks, including ABC, NBC, CBS, Fox and ESPN.
Alphabet, led by president Sergey Brin, is the holding company that houses Google, which is made up of the internet assets, including search and YouTube.
April 27, 5:30 p.m. Updated with comments by senior Google execs during Alphabet's analysts call.