Alphabet Inc (GOOG) (GOOGL) Shares Surge on Q4 Earnings Beat

The division of Alphabet into different business units assisted the core Google business given it is no longer saddled with “moon shots”, with its revenue coming in at $6.7 billion on a margin of 32 percent, up from $5.6 billion in operating income and a 31 percent margin in the same quarter of 2014.

The internet giant beat analyst expectations by reporting revenue of 21.3 billion United States dollars (£14.7bn) for the final quarter of last year, up from 18.1 billion U.S. dollars (£12.5bn) on the same period last year.

In opening trade on Wall Street after a robust earnings report, Alphabet shares rose 2.9% to lift its market capitalisation to $543 billion. Analysts surveyed by Thomson Reuters had forecast Alphabet to earn $8.10 a share on $16.9 billion in revenue.

Today, for the first time, Alphabet reported financial results that distinguish between its core “Google” business (which include search and advertising, along with things like Maps, Android, YouTube, and Chrome) and the experimental businesses – such as self-driving cars – that Alphabet is calling “other bets”.

The restructuring at Google seems to be paying off, since its new parent company, Alphabet, stole Apple’s spot as the most valuable company. Moreover, Alphabet became the world’s most valuable public company, as shares were up more than 8% in after hours trading. With its stock price at about $819 per share around 5 p.m. ET, Alphabet’s 687.73 million shares puts its market capitalization at about $563 billion.

Yes, the company actually called them bets.

Finally, revenue from non-advertising sources within the Google segment climbed 24% year over year to $2.1 billion, driven by strong growth from Play, Cloud, and Apps.

Alphabet reported that its Other Bets recorded $448 million in revenues and operating loss of $3.57 billion for the twelve months ended December 31.

It was for the first time give a glimpse at just how much money the company is throwing at so-called “moonshots”, or dream projects like smart houses and driverless cars. Four research analysts have rated the stock with a hold rating and forty-four have assigned a buy rating to the stock.

Breaking it downThis shouldn’t come as a big surprise, especially considering Porat’s comments largely mirror those she made three months ago in crediting strength of both YouTube and mobile search for Alphabet’s equally exceptional third-quarter 2015 performance.

“I would have to say that the resulting story certainly tells the story that Google wants to tell more than providing the insights that people want to see”, said Adam Berke, president and CMO of AdRoll, an online advertising retargeting company. Aggregate cost per click, though, fell 13 per cent year over year.