Published: Tue, February 05, 2019
Markets | By Otis Pena

Digital ads lift Google but shares hit by costs

Digital ads lift Google but shares hit by costs

Wall Street greeted the news Alphabet, parent company of Google Inc, which posted an $8.94 billion profit in the 4th quarter of 2018, with a 3.69 percent pummeling of its stock price during extended trading.

Alphabet reported net income of $8.95 billion for the fourth quarter, with earnings per share coming in at $12.77, exceeding analysts' forecasts of $11.08 per share.

"In 2018 we delivered strong revenue growth, up 23 per cent year over year to $136.8 billion, and up 22 per cent for the fourth quarter to $39.3 billion", Ruth Porat, Chief Financial Officer of Alphabet and Google, said in a statement on Monday.

Analysts polled by FactSet were expecting earnings per share of $10.86, or a profit of $7.6 billion, on revenue of $38.9 billion. Only problem: Some higher expenses for spending on cloud engineers and data centers as well as YouTube content didn't thrill investors.

But the company's profitability continued to fall in the quarter.

On a per-share basis, the Mountain View, California-based company said it had profit of $12.77. Losses in the category aren't uncommon since the other bets category is understood to be an umbrella for Alphabet's long-shot, experimental projects.

GM set to begin 4,000 white collar layoffs on Monday
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Greene and incoming leader Thomas Kurian are planning Google Cloud's 2019 strategy together, Pichai said, and the company plans to increase hiring in sales and marketing in hopes of adding more multiyear big-company cloud deals. When shoppers hunt for holiday gifts, they often use Google's search engine, letting the company send them targeted product ads based on those queries.

One stunning number is telling about Google's effectiveness as a business. Traffic acquisition costs are expected to remain flat, and sales of the Google Home smart speaker should improve. Thanks chiefly to its search ads as well ads on its YouTube video service, Google has 31.3 percent of the worldwide market to Facebook's 20.5 percent, according to eMarketer.

Still, ads from Google and rival Facebook Inc. are more relevant and effective than most other options - precisely because the companies collect so much information on activity across the internet and beyond.

Another Google segment of wide interest, called "Other Bets", that includes such companies like as health venture Verily and self-driving firm Waymo, rose 18 percent, to $154 million, well short of the $187.4 million analysts were looking for.

Amazon and Alphabet are increasingly competing for advertising dollars and in cloud computing.

Google's full-year operating margin fell by more than 2 percent from Q4 2017, representing a far larger decline than the overall business.

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