Surely you didn’t expect a global pandemic to slow down Google
, did you? After the U.S. stock markets closed for the day (not including after-hours trading of course), Google parent Alphabet reported a heck of a third quarter. For the three months from July through September, Alphabet added $11.2 billion in profit to its vault topping analysts’ expectations (and possibly making more money than Scrooge McDuck earned during the period.
Alphabet shares tack on more than $100 each after reporting third-quarter earnings
During the second quarter, Google reported its first-ever year-over-decline in advertising revenue. Would this negative trend continue during the third quarter? Would Google’s main business line wilt when faced with the continuing (and resurgent) pandemic? The answer was a resounding “no” as Google generated $37.1 billion in digital advertising gross during the period. In fact, as strange as it is to think this way, Google actually benefited from the disease since it forced many to stay at home leading YouTube to report more than $5 billion in advertising gross for the first time. That was a 32% increase year-over-year. Revenue related to Google Cloud hit $3 billion during the third quarter, a 44% gain year-over-year. Google and Alphabet Chief Financial Officer Ruth Porat said, “We’re pleased the way advertisers have reactivated their budgets.”
Google reported strong third quarter numbers as it gets investigated for anti-competitive behavior in search and search advertising
As many as you know, Google pays Apple a ton of money to be the default search engine on the iPhone. Of course, the only way that this works is if Google takes in more in profits than it lays out in traffic-acquisition payoffs. Last month, Google paid out $8.2 billion in such costs, 13% more than what it spent on such payments during the same time period last year. The payments from Google to Apple are the subject of a lawsuit filed by the Department of Justice (DOJ)
. The latter accuses Google of anti-competitive behavior in regards to search and search advertising.
Alphabet and Google CEO Sundar Pichai, said today, In terms of the specifics of the DOJ case and stuff, I’m confident we have approached everything with the view of making sure we create the best user experience. We look forward to making our case, but it’s definitely early days and we are still reviewing and understanding it all.” The executive also noted that “We had a strong quarter, consistent with the broader online environment. It’s also a testament to the deep investments we’ve made in AI and other technologies, to deliver services that people turn to for help, in moments big and small.” CFO Porat stated that “Total revenues of $46.2 billion in the third quarter reflect broad-based growth led by an increase in advertiser spend in Search and YouTube as well as continued strength in Google Cloud and Play. We remain focused on making the right investments to support long-term sustainable value.”
For the quarter, Alphabet revenue rose 14% to $46.17 billion. Net income rose to $11.25 billion, up 59.1% year-over-year. Earnings per share for Q3 jumped 16% from $10.12 to $16.40.
After gaining 3.05% or $46.08 in regular trading to $1,556.88 a share, investors latched on to the earnings report in a big way. In after- hours trading, Alphabet (GOOG) soared $101.12 (6.5%) to $1,658.00. For the year, Alphabet is up 16%. The company now is valued at $1.1 trillion having risen five-fold over the last ten years. Alphabet also added over 18,000 employees to its headcount with 132,121 people employed by the company compared to the 114,096 that Alphabet paid during Q3 last year.