Google kicks Apple in its valued assets

Alphabet, the parent company of Internet giant Google, surpasses the market value of rival Apple on Tuesday to become the world’s most valuable publically traded company, APA reports quoting Anadolu agency.

Alphabet’s earnings report for the last quarter of 2015 represented the first time the company has broken out its so-called moon-shot ventures, such as Google Fiber and its self-driving auto initiative. The result was that its shares went up 9 percent making Alphabet is now worth around $568 billion, compared with Apple, which has a value of $535 billion.

A strong earnings report, a profit of $4.9bn (£3.4bn) for the fourth quarter, an increase from $4.7bn a year ago, saw the firms stock spike in after-hours trading by as much as 9%. “Given the early stage nature of a number of these efforts, they are likely to require additional investment prior to generating very meaningful revenues”, said Ruth Porat, Alphabet Chief Financial Officer.

“Keep in mind that Other Bets represents an aggregation of businesses, many of which operate in distinct sectors with different business models”, she said in an earnings call transcribed by Seeking Alpha.

Other revenue for Google, which includes Play, Cloud and Apps, came in at $2.1 billion, up 24 per cent year-on-year. There are life sciences now, broadband services, and Nest Labs among others.

This translate to a profit margin of 40 percent while Apple recorded an operating profit margin of 32 percent in its most recent quarter. The losses so far for these bets have been calculated to be around $3.5 billion for the past year.

Google remains the core earner – with its advertising revenue rising nearly 17% to $19.1bn, aided by 31% growth in paid clicks.

One worrying element that investors might eventual see as Google’s dar cloud might be the continuing decline in cost per click: aggregate cost per click was down 13 percent, and down 16 percent on Google websites.

That second category’s numbers were not as impressive as the Google segment’s were, however.