Alphabet share price down 4% after Q1 results revenue miss

Google parent Alphabet stock falls after a mixed Q1 earnings report.

Google logo after Alphabet Q1 earnings Source: Bloomberg

Google’s parent Alphabet share price is down after Q1 revenue narrowly missed expectations. However, Alphabet’s Q1 earnings were better-than-expected.

Alphabet earnings: key figures

Earnings per share $11.90
Revenue $36.34 billion
Traffic acquisition costs $6.86 billion

Alphabet share price down 4% after Q1 results revenue miss

Alphabet’s earnings per share were $11.90, exceeding Wall Street expectations of $10.61. Alphabet’s Q1 profits were also impacted by fines from the European Union (EU). The EU leveled a $1.7 billion fine on Google based on allegations of antitrust violations. Excluding the fine, Alphabet’s Q1 earnings were $9.50 a share.

Alphabet’s Q1 revenue was $36.24 billion, slightly less than the predicted $37.33 billion. Traffic acquisition costs, the payment Google pays to companies to be their main search engine, were $6.86 billion, falling below the projected $7.26 billion.

Advertising revenue also dropped to $30.72 billion, beneath the expected $32.64 billion. Despite the slowdown in ad revenue, Ruth Porat, Alphabet’s chief financial officer, still touted the positive aspects of Alphabet’s Q1 profits.

‘We delivered robust growth led by mobile search, YouTube, and[Google] Cloud with Alphabet revenues of $36.3 billion, up 17% versus last year, or 19% on a constant currency basis,’ said Porat.

Aside from Google, Alphabet’s ‘other bets’ like self-driving car Waymo were predicted to increase Alphabet’s Q1 revenue. Alphabet’s Q1 profits from other ventures increased slightly to $170 million, jumping from $150 million in 2018.

How did Alphabet’s Q1 earnings compare to other tech companies?

Compared to Amazon’s Q1 earnings, Alphabet’s Q1 earnings were worse -than-expected. Amazon’s Q1 earnings and revenue both surpassed expectations, while Alphabet had a mixed earnings report of high earnings and lower revenue.

What is Alphabet’s Q2 guidance?

While Google parent Alphabet didn’t give specific information about Q2 guidance, Porat said that the robust US dollar would lead to more spending to boost Alphabet Q2 revenue.

‘Based on the continued strengthening of the US dollar relative to key currencies, we expect to continue to see headwinds to our revenues and operating income again in the second quarter,’ said Porat.

Alphabet’s Q1 earnings suffer from declining ad revenue and fines

Alphabet’s Q1 earnings were high because of the growth of its Google Cloud computing division. However, Alphabet’s Q1 revenue report was mixed because of declining ad prices, overwhelming fines, and increased expenditures.


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