Google's parent company Alphabet was at the top of Wall Street targets with 23% revenue growth in the first quarter, but the better than expected performance was not enough to cope with concerns over rising spending and the biggest risks of regulatory pressure to invalidate in years.
Alphabet's shares rose more than 4 percent in after-hours trading, but reversed quickly and fell back to the price the stock closed in regular trading.
"While fundamental concerns coupled by regulatory black clouds continue to be overhangs in the name, we believe that 1Q advertising and" Bread and Butter "search revenue were healthy and a good barometer of potential strength in the rest from 201
Here are the key figures:
- Net sales (ex-traffic acquisition cost): Google reported $ 24.8 billion, an increase of 23.5% over the same period last year. The Bloomberg surveyed analysts had expected $ 24.5 billion.
- GAAP: Google reported $ 13.33, while analysts had forecast $ 9.30 (the difference due to a change in booking), and Google now recognizes profits from holdings such as its share Uber taken into account).
- Traffic Acquisition Costs (TAC): $ 6.288 billion, or 24 percent of ad revenue versus $ 4.629 billion, or 22 percent of ad revenue.
- Number of employees: 85,050, an increase of 15 percent over the 73,992 employees reported in the first quarter of last year.
- Investment: $ 7.3 billion, up sharply from $ 2.5 billion in the year-ago quarter.
Google's first quarter results included a series of changes in accounting and business structures that provided investors with new insights into technology giants.
Key changes included the shift of Google's results for Nest, the smart home appliances business, re-integrated into Google earlier this year after operating as a separate "Other bet" under the Alphabet umbrella has been.
A first look into the nest
Although Google has never disclosed Nest's financial results, changing Google's reporting practices has made it possible to filter out the company's results over the past year. Nest earned $ 112 million in revenue in the first quarter of 2017, and reported operating losses of $ 284 million.
Despite the red ink, Google boss Sundar Pichai described Nest's business in positive words during a conference call with analysts on Monday, noting that Nest sold more units in 2017 than in the past two years combined.
Google is now adding Nest's results to the "Other revenue" category, along with Google's other hardware products, such as the Pixel smartphone and the Home smart speaker. This category recorded $ 4.3 billion, compared to $ 3.2 billion in the first quarter of 2017, or 34 percent more.
What about the other bets?
Because Alphabet has moved Nest, this business is no longer included in Other Bets – the collection of standalone companies that includes Waymo (self-driving cars) and Verily (healthcare technology).
Google CFO Ruth Porat said the main driver for Other Bets sales is now generated by Verily and Google Fiber, the high-speed Internet access service.
- Other Betting Sales: $ 150 million, up from $ 132 million in the same period last year.
- Operating Losses on Other Bets: $ 571 million, after an operating loss of $ 703 million a year ago.
The results are in a difficult phase for Google, the dominant search engine in the world, and for the owner of the online video Youtube.