Alphabet trades 6% lower as it misses the estimate for revenue in the fourth quarter

Alphabet trades 6% lower as it misses the estimate for revenue in the fourth quarter

  • Alphabet trades 6% lower as it misses the estimate for revenue in the fourth quarter.
  • Alphabet announced revenue from Youtube and Cloud segments for the first time.
  • Advertising remains as the primary source of revenue for Alphabet Inc.
  • Alphabet traded 6% lower in the stock market following the earnings report.

In its quarterly earnings report on Tuesday, Alphabet Inc. printed significantly higher earnings than expected. On the revenue’s front, however, the company lost to analysts’ estimate in the recent quarter. Following the earnings report, the Google parent company was seen trading 6% lower later in the day.

Based on Refinitiv’s data, analysts had anticipated $12.53 of earnings per share for Alphabet in the fourth quarter. Tuesday’s report, however, recorded the company to have made a significantly higher $15.35 of earnings per share. In terms of revenue, experts had forecast the company to generate $46.94 billion in the recent quarter. But the performance results announced a sharply lower $46.08 billion in revenue in Q4. Traffic acquisition costs matched the analysts’ estimate of $8.50 billion in the Alphabet’s quarterly earnings report.

Alphabet Announced Youtube And Cloud Segments’ Revenue For The First Time

The recent quarter marked the very first time for Alphabet to announce its revenue from Youtube and Cloud segments. As per the tech giant, it generated $15.15 billion in revenue from Youtube in fiscal 2019. In 2018, the company added, Youtube revenue was capped at $11.16 billion. In the fourth quarter of the past year, $4.72 billion of revenue was attributed to Youtube up from $3.61 billion announced for 2018’s Q4. Youtube’s revenue from non-advertising unit such as Youtube TV is included in a different segment of other revenue.

Cloud business, on the other hand, recorded $8.92 billion in revenue last year. Fiscal 2018, as per Alphabet, had generated a much lower $5.84 billion in revenue from the cloud business. 2019’s fourth quarter saw $2.61 billion of revenue from this segment while it was reported at $1.71 billion in the same quarter last year.

Advertising Remained The Primary Source Of Revenue For Alphabet

Total advertising revenue for Alphabet touched $37.93 billion mark in the fourth quarter versus $33.91 billion in the previous quarter and $32.63 billion in the same quarter last year. Advertising still kept its reputation of being the primary source of revenue for Alphabet.

Another $5.26 billion in quarterly revenue came from the “other revenue” unit that includes hardware such as cloud products and Pixel phones. In 2018’s Q4, others segment posted $6.48 billion in revenue while it was registered at $6.43 billion in 2019’s Q3. Other bets, on the other hand, contributed $172 million in revenue for Alphabet in the recent quarter versus $154 million in the same quarter last year. Other bets include Waymo (Google’s self-driving car unit) and Verily (sciences company).

By Michael Harris
I began trading in my early 20's at a local company and since then have combined my knowledge and love of content to become a news writer. I am passionate about bringing insightful articles to readers and hope to add some value to your portfolios!

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