Google Search Leads the Way, as Alphabet Beats Earnings Expectations

Its adjusted earnings increased 28.3% to $8.67 per share, above the $8.10 consensus estimate based on data compiled by Thomson Reuters.

The market absolutely adored Alphabet’s financials and drove the stock up $39.00/ share or 5.91 percent in after-hours trading to $791.00 per share.

Alphabet- Google’s parent company- has surpassed Apple as the world’s most valuable company after its latest earnings report, BBC reported.

“This makes Alphabet an even stronger bellwether for investors to watch”, Scott Fullman, chief strategist at Revere Securities Corp, said after the earnings report came out.

Porat chalked the huge growth in paid clicks up to new ad formats that Google introduced previous year.

While this was the first time Alphabet had reported consolidated results, its statement showed it paid an effective tax rate of 5% – down from 18% in the same period past year.

The numbers were lapped up by investors, who saw room for growth in Google’s traditional business, and were relieved to see that spending on new projects it calls “Other Bets” was not as lavish as some had feared. Over all, while revenue was up 37 per cent for this segment, standing at $448 million, it ultimately operated at a loss of £3.1 billion.

“We’re excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people”.

Alphabet Inc. earned $4.9 billion on revenue of $21.3 billion in the fourth quarter.

Josh Olson, an analyst at Edward Jones & Co, told Bloomberg: “Alphabet’s core business looks very healthy”. Google apps and devices compete for market share against Apple iPhones. The company’s opaque accounting made it hard to know just how much profit Google reaped from its primary business – selling digital ads next to everything from search results to YouTube videos.

Google is forecast to capture $45.58 billion in search ad revenue in 2016, or 55.6% of the search ad market worldwide, according to eMarketer.

For the first time in its history, Google’s parent company revealed the sales and losses for its experimental and “moonshot” initiatives, including Google Fiber, Calico, Nest, Verily, Google Ventures, Google Capital and X.

Yes, the company actually called them bets.