Alphabet Tumbles After Earnings Miss

Google parent Alphabet missed earnings expectations and tumbled over 5% after hours…

Google is still growing in a serious way, with the number of money-making clicks up around 43% from the same time last year. But each individual click is making less money now.

Earnings missed, operating income disappointed, and costs per click fell notably.

  • 4Q EPS $9.70, estimate $10.04 (range $9 to $10.92) (Bloomberg data)
  • 4Q paid clicks +43%
  • 4Q Google other revenue $4.69 billion
  • 4Q revenue ex-TAC $25.9 billion, estimate $25.59 billion (range $24.91 billion to $26.36 billion) (BD)
  • 4Q cost-per-click -14%
  • 4Q operating income $7.66 billion, estimate $10.24 billion (range $9.92 billion to $10.90 billion) (BD)
  • 4Q Other Bets revenue $409 million
  • 4Q Other Bets operating loss $916 million
  • 4Q Google advertising revenue $27.23 billion
  • 4Q free cash flow $5.96 billion
  • 4Q capital expenditure $4.31 billion

Bloomberg’s Gerrit De Vynck notes one potential silver lining:

Costs in the “Other Bets” division — which works on new business lines — are coming down while revenue is going up.

The division is still losing money, but it’s not nearly as bad as it was last year.

Of course there was an attempt to save the day…

  • Alphabet to Buy Back Shares up to Added $8.59B Class C Stock

But for now it’s not helping the stock.