Alphabet profit revs shares, beats Apple

Revenue rose 18 percent year-on-year to $21.3 billion.

Adjusted earnings of US$8.67 per share handily beat analysts’ average estimate of US$8.10 per share.

Alphabet will officially overtake Apple in market value if both companies’ shares open around current levels on Tuesday.

Alphabet’s main subsidiaries include Google, Nest Labs, and Google X labs, which are devoted to big-vision new technologies such as self-driving cars, along with such projects as smart “Google Glass” spectacles, drones, health care and Google TV – none of which has become a major source of income for the company yet.

Shareholders meanwhile seem to recognise that Alphabet is no longer “just another search company”. Google accounted for all but a sliver of its parent company’s revenue.

During a conference call to discuss the earnings, Alphabet’s chief financial officer, Ruth Porat, said sales in the United Kingdom were up 20% from previous year.

The company’s combined share classes were then valued at $554 billion, beating Apple Inc (AAPL), which was worth around $534 billion and whose shares were slightly falling during extended trading.

At the time of the restructure, Google founders Larry Page and Sergey Brin said that, by separating the exploratory projects from Google’s core internet operations, investors would be able to see that the core business remained highly profitable, even if other ventures failed to show a profit for years.

Alphabet also reported that Google’s Gmail has surpassed a billion users, the seventh Google property to reach this awesome milestone. Google websites generated $14.9 billion, Google Network Members’ websites $4.1 billion, Google advertising revenues $19.1 billion and Google other revenues $2.1 billion. “That’s going to build investors’ confidence about the other bets they’ve been making”.

Total operating losses on “Other Bets” – which includes “moonshots” such as self-driving cars, glucose-monitoring contact lenses and Internet balloons – increased to $3.57 billion in the 12 months ended December 31.

The surge came after the conglomerate posted an 18% increase on its year-on-year revenues, largely on the strength of its YouTube and programmatic advertising offerings.

Google: “Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome, Google Play as well as hardware products we sell, such as Chromecast, Chromebooks and Nexus”.