Alphabet (Google) share price: 3 things we learnt from Q4 results

Alphabet’s share price fell in after-hours trade following the release of Q4 results that undershot a number of key analyst expectations.

Alphabet share price: a revenue miss

When we previewed Alphabet's now-reported Q4 earnings mid-last week, we pondered whether the internet behemoth would beat or miss analyst expectations.

Here we noted that analysts were expecting $38.40 billion in revenue from Alphabet – excluding Traffic Acquisition Costs (TAC).

Disappointingly for investors, and as Bloomberg reported today, Alphabet missed on Q4 revenue targets (on an ex-TAC basis).

Here, Google posted ex-TAC Q4 revenues of $37.57 billion, against estimates of $38.40 billion, according to Bloomberg Data.

Google Search & Other continues to be the largest revenue driver for the company, contributing $27,185 billion in sales during the quarter.

YouTube advertising contributed $4,717 billion to the Group’s overall Q4 revenue.

An operating income miss

On the bottom-line, the company also missed some key estimates: posting Q4 operating income of $9.27 billion – against analyst estimates of $9.79 billion. Alphabet also saw its operating margin deteriorate somewhat during the quarter, reporting Q4 operating margins of 20% – against analyst estimates of 24.7%.

In saying all this, earnings per share (EPS) did come in higher during the quarter, with Alphabet reporting Q4 EPS of $15.35 per share, against analyst estimates of $12.50 per share.

With these misses in mind, Alphabet saw its stock come off in after-hours trade – dropping as much as 5.16% – to a low of $1,409 per share – in just a couple of hours.

Do you own Alphabet shares? You can hedge your downside risk by trading CFDs now.

Though likely a disappointment for shareholders, the Alphabet (GOOG) share price has been a strong performer over the last year, rising ~30% in that period.

In the last five years Alphabet’s (GOOG) share price has risen around 177%.

Management commentary at a glance

Though GOOG has stumbled in after-hours trade, the company, relative to its size (with a ~$1 trillion market capitalisation) continues to tout ‘strong’ revenue growth.

As Ruth Porat, the company’s Chief Financial Officer said:

‘In 2019 we again delivered strong revenue growth, with revenues of $162 billion, up 18% year over year and up 20% on a constant currency basis.’

Looking to provide further transparency on the nature of the business – Sundar Pichai, Alphabet and Google’s Chief Executive said:

‘I’m really pleased with our continued progress in Search and in building two of our newer growth areas — YouTube, already at $15 billion in annual ad revenue, and Cloud, which is now on a $10 billion revenue run rate.’

Looking at future opportunities, Mr Pichai additionally said:

‘Our investments in deep computer science, including artificial intelligence, ambient computing and cloud computing, provide a strong base for continued growth and new opportunities across Alphabet.’

Alphabet currently has 41 Buy recommendations, five hold recommendations and 0 sell recommendations, according to Bloomberg Data.

Practise trading international stocks with an IG demo account now


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get commission from just 0.08% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.