Google parent Alphabet missed earnings expectations and tumbled over 5% after hours.
The amount Google charges for clicks on ads is falling. It was down around 14% from the same quarter last year, and down 6% from last quarter. This is a key metric for the company, which gets the vast majority of its revenue from ads.
Google is still growing in a serious way, with the number of money-making clicks up around 43% from the same time last year. But each individual click is making less money now.
Earnings missed, operating income disappointed, and costs per click fell notably.
4Q EPS $9.70, estimate $10.04 (range $9 to $10.92) (Bloomberg data)
4Q paid clicks +43%
4Q Google other revenue $4.69 billion
4Q revenue ex-TAC $25.9 billion, estimate $25.59 billion (range $24.91 billion to $26.36 billion) (BD)
4Q cost-per-click -14%
4Q operating income $7.66 billion, estimate $10.24 billion (range $9.92 billion to $10.90 billion) (BD)
4Q Other Bets revenue $409 million
4Q Other Bets operating loss $916 million
4Q Google advertising revenue $27.23 billion
4Q free cash flow $5.96 billion
4Q capital expenditure $4.31 billion
Bloomberg’s Gerrit De Vynck notes one potential silver lining:
Costs in the “Other Bets” division — which works on new business lines — are coming down while revenue is going up.
The division is still losing money, but it’s not nearly as bad as it was last year.
Of course there was an attempt to save the day…
Alphabet to Buy Back Shares up to Added $8.59B Class C Stock
But for now it’s not helping the stock.
Nasdaq futures are suffering as GOOGL losses offset AMZN after hours gains…
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