Alphabet Inc reports record profit in the fiscal fourth quarter

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Feb 2, 2021
  • Alphabet Inc reports record profit in the fiscal fourth quarter.
  • The tech giant generated £33.99 billion of ex-TAC revenue in Q4.
  • Total advertising revenue stood at £33.82 billion in the recent quarter.

Alphabet Inc. (NASDAQ: GOOGL) reported its financial results for the fiscal fourth quarter on Tuesday that beat Wall Street estimates despite the ongoing COVID-19 crisis.

Alphabet shares were reported about 6% up in extended trading on Tuesday. The stock is now trading at £1,494.90 per share versus a low of £772 per share in March 2020. The price action should come in handy if you are interested in investing in the stock market.

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At the time of writing, the Mountain View-based company is valued at £950 billion and has a price to earnings ratio of 37.08.

Alphabet’s Q4 financial results versus analysts’ estimates

Alphabet said that its net income in the fourth quarter came in at £11.15 billion that translates to £16.33 per share. In the same quarter last year, its net income was capped at a lower £7.81 billion or £11.34 per share.

The tech giant said that excluding traffic-acquisition costs (TAC), it generated £33.99 billion of revenue in Q4 versus the year-ago figure of £33.73 billion. In the prior quarter (Q3), Alphabet had recorded £8.24 billion of net income.

According to FactSet, experts had forecast the company to post £32.10 billion of ex-TAC revenue in the recent quarter. Their estimate for per-share earnings stood at a lower £11.54. In separate news from the U.S., United Parcel Service also published its earnings report for the fiscal fourth quarter on Tuesday.

The American multinational valued traffic acquisition costs in the fourth quarter at £7.66 billion versus £6.82 billion expected. Search revenue, as always, remained the highest at £23.35 billion in Q4.

Other prominent figures in Alphabet’s earnings report

At £5.04 billion, revenue from YouTube ads topped analysts’ estimate of £4.47 billion. Alphabet reported £2.80 billion of revenue from Google Cloud in the recent quarter as compared to the experts’ prediction of a slightly lower £2.79 billion. Total advertising revenue, as per Alphabet, stood at £33.82 billion in the fourth quarter.

Analyst Nicole Perrin of eMarketer commented on Alphabet’s earnings report on Tuesday and said:

“Again, all three of Google’s main lines of ad business outperformed our forecast, including YouTube, which grew by almost 46% in Q4 compared a year earlier; Google Network Member revenues, which were up almost 23%; and search, which was up more than 17% despite continuing low spending from travel advertisers, traditionally one of Google Search’s most important segment.”

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