Shares of Google’s parent company Alphabet Inc. soared during the extended trading hours on Thursday after the tech giant resumed ad sales growth and exceeded Wall Street’s expectations with quarterly earnings reports.
The letters GOOG,
The company announced net income for the third quarter of 11.25 billion US dollars, or 16.40 US dollars per share, compared with 7.06 billion US dollars in the same period last year, or 10.12 US dollars per share. Revenue after deducting transportation purchase costs increased to 38.01 billion US dollars from 33.01 billion US dollars in the same period last year. Analysts surveyed by FactSet had previously expected TAC revenue to be US$35.37 billion and profit of US$11.30 for the quarter.
In after-hours trading, Alphabet’s Class C shares rose more than 7%, after rising 3.3% in regular trading before closing at $1,567.24.
After two consecutive quarters of year-on-year decline in revenue, advertising revenue increased from $33.8 billion to $37.1 billion, which put pressure on Google stock. YouTube advertising revenue increased from 3.8 billion US dollars a year ago to 5.04 billion US dollars, while Google Cloud sales increased from 2.38 billion US dollars to 3.44 billion US dollars.
Chief Financial Officer Ruth Porat said on the conference call: “In terms of revenue, in the third quarter, we benefited from broad improvements in advertiser spending in all regions and almost all verticals.” “This is both. Reflected in search results, but also reflected in the rebound in YouTube brand advertising expenditure.”
“Although we are satisfied with the performance in the third quarter, there is clearly uncertainty in the external environment,” Porat said.
Pinterest Inc. PINS believes that online advertising sales have rebounded from the early weakness associated with COVID-19 to the third quarter.
And Snap Inc. SNAP,
A substantial increase in advertising sales has been disclosed, which is attributed to higher customer engagement. However, COVID-19 is not the only problem for Google. This month, Alphabet was hit by antitrust accusations from the Department of Justice, and CEO Sundar Pichai faced serious questions from the senator at the committee hearing on Wednesday.
Alphabet’s stock has risen 18% this year, while the S&P 500 index SPX has risen 3%.
And the high-tech Nasdaq Composite Index COMP rose 25%,