Alphabet Inc blows past Wall Street estimates in the fiscal third quarter

Alphabet Inc. (NASDAQ: GOOGL) published its financial results for the fiscal third quarter on Thursday that blew past Wall Street estimates. The company attributed its hawkish performance primarily to a significant increase in advertising revenue.  

Shares of the company jumped more than 6% in after-hours trading on Thursday. At £1,281.59 per share, Alphabet Inc. has recovered over 50% since its year to date low of £814.72 per share in March, when the impact of COVID-19 was at its peak. The stock had a per-share price of £1,056 at the start of 2020.  

Alphabet’s Q3 financial results versus analysts’ estimates

According to Refinitiv, experts had forecast the company to print £33.16 billion of revenue in the third quarter. Their estimate for earnings per share was capped at £8.66. In its report on Thursday, Alphabet topped both estimates posting a higher £35.69 billion of revenue and £12.68 per share in Q3.

The American multinational conglomerate said that it generated £2.66 billion of revenue from Google Cloud versus a lower £2.57 billion expected. At £3.90 billion, YouTube ads revenue also topped the analysts’ estimate of £3.39 billion. Alphabet valued its traffic acquisition costs (TAC) at £6.32 billion as compared to £5.92 billion that experts had predicted.

In the prior quarter (Q2), the Mountain View-based company had reported its first-ever decline in revenue.

Alphabet said that its total advertising revenue in the quarter that concluded on 30^th September registered at £28.68 billion versus the year-ago figure of £26.13 billion. YouTube ad growth, the U.S. tech giant said, was particularly robust in Q3 noting a 32% annualised increase. Advertising revenue from “Search and Other” category came in at 6% higher than last year.

Other prominent figures in Alphabet’s earnings report

Other prominent figures in Alphabet’s earnings report on Thursday include £4.24 billion of “Other” revenue as compared to £3.13 billion in the same quarter last year. From “Other Bets”, Google’s parent company valued its revenue at £137.59 million in the recent quarter versus £119.81 million last year.

Operating loss attributed to Other Bets recorded at £850 million as compared to a lower £727.37 million in the third quarter of the previous year. A report published in late September said that Google was getting closer to acquiring Fitbit.

At the time of writing, the American multinational conglomerate is valued at £820 billion and has a price to earnings ratio of 35.21.