Alphabet Inc Shares Fall As Q4 Profit Misses, But Revenue Beats Estimates

Alphabet Inc Shares Fall As Q4 Profit Misses, But Revenue Beats Estimates

Alphabet Inc Shares Fall As Q4 Profit Misses, But Revenue Beats Estimates

Alphabet Inc., (GOOG,GOOGL), the parent company of Google, Thursday reported an increase in profit for the fourth quarter, reflecting largely revenue growth in search and advertising. The average estimate of 16 analysts surveyed by Zacks Investment Research was for earnings of $9.63 per share. Net income was $5.33 billion, up from $4.92 billion.

The Chocolate Factory overseer reported $26.06bn in Q4 2016 revenue, up from $21.33bn during the same period a year ago.

Analysts expected revenue of $25.22 billion for the quarter. Alphabet attributes its growth in revenue of 22% (24% in constant currency) to mobile search and YouTube. Google segment includes Internet products, such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome, Google Play, and hardware products, including Chromecast, Chromebooks and Nexus, which are sold by the Company.

Outside of the core Google business are Alphabet's "Other Bets", the separate companies exploring ambitious new businesses, from self-driving cars to drones.

Alphabet shares have increased 8 percent since the beginning of the year, while the Standard & Poor's 500 index has increased nearly 3 percent.

Google might capture even more ad dollars thanks to its PLAs, as Amazon - for the first time - began advertising through the format previous year. Other bets are still such a tiny part of Google's revenue, but it's finally starting to move the needle - and not into the red. Google revenue for the quarter was almost $26 billion-up 22% over the same quarter last year-and it brought in $7.8 billion in profit, up roughly 17%.

Several company insiders have filed Insider transactions, on Jan 18, 2017, Sundar Pichai (CEO, Google Inc.) sold 4,000 shares at $817.80 per share price. MKM views Alphabet as the most dominant tech company on the field today, with a strong track record and many opportunities to further exploit its market position and competitive advantages.

Microsoft Corporation (NASDAQ:MSFT) stock is trading up 1.5% in after-hours, after the software giant reported a 3.6 percent rise (year-over-year) in fiscal second-quarter profit, bolstered by rising customer sign-ups for Azure and Office cloud-computing services.

Paid clicks, or clicks on Google ads, rose 36 per cent, compared with a 33 per cent increase in the third quarter.

Alphabet ended 2016 with $86.3 billion in cash, up from $73 billion a year ago. Thirteen analysts surveyed by Zacks expected $20.58 billion. Its first-ever phone, the Google Pixel, launched to universally positive reviews, but has struggled to meet demand.

"It's off to a great start", said Pichai.

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