Thursday, April 30, 2020 12:01:29 AM
https://ih.advfn.com/stock-market/NASDAQ/alphabet-GOOGL/stock-news/82332495/alphabet-posts-sales-rise-with-a-caveat-wsj
By Rob Copeland
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 29, 2020).
Google's parent posted strong results in what the company called "a tale of two quarters," with a head start in advertising earlier this year making up for the crunch of the global pandemic later.
Alphabet Inc.'s results add to indications that Silicon Valley might weather the economic slowdown better than others in the corporate world. One heavy caveat: Alphabet executives said that company performance fell off sharply as the coronavirus crisis accelerated, and cautioned that they couldn't predict how the coming months would turn out. Chief Executive Sundar Pichai said that March produced "a significant and sudden slowdown in ad revenues."
Alphabet reported total revenue of $41.2 billion for the first quarter, up 13% compared with a year earlier. Though the company doesn't provide future guidance for earnings and frequently diverges from market expectations, this was a particularly well-timed reveal for a company that has been a model of growth during its 22 years of existence.
Analysts polled by FactSet had expected revenue of $40.8 billion. The company's shares gained more than 7% in after-hours trading after the release.
The Alphabet results represent a significant public hint of how the major technology companies are faring in an economy brought low by the Covid-19 pandemic. The conglomerate's many arms overlap with tech rivals reporting earnings later this week. Facebook Inc. and Microsoft Corp. report on Wednesday, while Amazon.com Inc. and Apple Inc. follow on Thursday.
Snap Inc. reported another tech surprise to the upside last week, when it posted growth in users and revenue, sending its shares up more than 30%.
Alphabet's operating profit came in at $8 billion, up from $6.6 billion a year ago. The company makes most of its money from online advertising in areas such as search, where many major customers are pulling back sharply in industries including travel and retail. The YouTube unit, on the other hand, has an opportunity to grab eyeballs, and associated advertising, from homebound users turning to the video platform in lockdown.
Google's revenue has risen in every quarter of its history.
"People are relying on Google's services more than ever, and we've marshalled our resources and product development in this urgent moment," Mr. Pichai said in a statement.
He said on a call with analysts that coronavirus-related searches were, at peak, coming in at four times the pace of equivalent queries during the Super Bowl. A few minutes later, however, executives cautioned that they weren't sure whether they could make money off the increased activity.
Despite the encouraging overall results, Google showed signs of a slowdown across the board that could also affect other tech giants. Chief Financial Officer Ruth Porat called it "a tale of two quarters," with the period bifurcated by the start of U.S. quarantine orders in March.
Advertising revenue on the company's traditional properties like search -- its longtime flagship franchise -- was tracking down more than 10% year over year by the end of March, Ms. Porat said, a possible indicator for advertising rivals Amazon and Facebook. New hardware activations of devices fell in the first quarter, a potentially discouraging sign for Apple. "Other Bets," a category that includes theoretically more-static outlying efforts like self-driving-car division Waymo, lost more than before.
YouTube's advertising revenue, a small but growing part of Alphabet, did better, up 33%. That growth, too, was down dramatically by the end of the quarter, the company said.
Questions remain about what comes next. Alphabet's first-quarter earnings report includes only a few weeks of results during which lockdown orders first swept the U.S. Some of the company's biggest advertisers, such as travel agencies, entertainment brands and even Amazon have said they plan to pull back on marketing more -- even if the country opens back up soon without major complications. Morgan Stanley analysts project that online advertising will suffer more this year than during the 2008 financial crisis.
"The second quarter is going to catch the brunt of it," said analyst Mark Shmulik of AllianceBernstein.
And yet Silicon Valley has found itself in an unusually advantageous position during the public-health crisis. Less than two months ago, Google and its peers were in the government's crosshairs. The Justice Department was undertaking a wide-ranging antitrust investigation, and the Trump administration was probing Google Health for potential civil-rights violations regarding its trove of sensitive patient data.
While those inquiries are continuing, Google and others are now engaged in many public efforts to stem the pandemic. In addition to running testing sites in California for Covid-19, the disease caused by the new coronavirus, the company is developing software that would alert users when they have potentially been exposed to people infected with the virus. The technology, a partnership with rival Apple, is slated to be released in May, though it remains to be seen how widely it will be adopted.
Write to Rob Copeland at rob.copeland@wsj.com
(END) Dow Jones Newswires
Recent GOOGL News
- Form 8-K - Current report • Edgar (US Regulatory) • 09/24/2024 12:31:01 PM
- AIG names new CFO; Progyny Drops 24% After Losing Key 2025 Contract; Exicure Jumps 190% With Nasdaq Extension • IH Market News • 09/19/2024 10:26:48 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/18/2024 10:30:53 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 09/18/2024 08:42:30 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/18/2024 05:16:19 PM
- Meta Strengthens Child Privacy on Instagram; Google Overturns $1.7 Billion Antitrust Fine; Snap Updates Spectacles • IH Market News • 09/18/2024 10:13:07 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/18/2024 01:38:59 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/17/2024 11:45:50 PM
- Microsoft Boosts Share Buyback, Raises Dividends by 10%, Intel Secures Chip Deal with Amazon • IH Market News • 09/17/2024 10:40:35 AM
- OpenAI Unveils Strawberry AI Model Series; Boeing Stock Falls 4% Amid Strike; HR Surges 20% on Growth Forecast • IH Market News • 09/13/2024 10:12:55 AM
- Norfolk Southern CEO Fired, Ryanair Lowers Fare Forecast, 23andMe Considers Acquisition Proposals • IH Market News • 09/12/2024 10:02:29 AM
- GameStop plunges 11% on stock offering, DJT drops post-debate, GSK fails shingles vaccine trial • IH Market News • 09/11/2024 10:25:41 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/10/2024 10:43:34 PM
- Apple Loses EU Dispute; Google’s $2.7 Billion Fine Upheld; Oracle Shares Surge 9% • IH Market News • 09/10/2024 10:02:31 AM
- Dell, Palantir, and Erie Will Be Added to the S&P 500; Boeing Avoids Strike; Apple Event Takes Place Today • IH Market News • 09/09/2024 10:05:35 AM
- Broadcom Down 10% Post-Earnings, UiPath Up 8%; Qualcomm Eyes Intel Assets; Salesforce Acquires Own Company • IH Market News • 09/06/2024 11:59:00 AM
- Qualcomm Develops Mixed Reality Glasses; Verizon to Boost Dividend, Eyes Acquisition; Samsonite Plans US Dual Listing • IH Market News • 09/05/2024 10:11:35 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 09/04/2024 08:13:46 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/03/2024 09:46:53 PM
- Big Lots Falls 27%, Considers Bankruptcy; DraftKings Acquires Simplebet, Berkshire Hits $1 Trillion • IH Market News • 08/29/2024 10:06:50 AM
- High Volatility Expected in Nvidia Report, Ambarella Soars 20%, Hertz Strengthens Board, Apple Cuts Jobs • IH Market News • 08/28/2024 09:50:36 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/27/2024 11:03:54 PM
- IBM Closes China Research Division, Uber Fined $324M, Starliner to Return Without Astronauts • IH Market News • 08/26/2024 12:58:21 PM
- Schwab and Snowflake Retreat in Premarket, WeRide Postpones IPO, Halliburton Cyberattack, McDonald’s Instagram Hack • IH Market News • 08/22/2024 09:37:42 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 08/21/2024 08:24:36 PM
FEATURED Integrated Ventures, Inc Announces Strategic Partnership For GLP-1 (Semaglutide) Procurement Through MedWell USA, LLC. • Sep 24, 2024 8:45 AM
Avant Technologies Accelerates Creation of AI-Powered Platform to Revolutionize Patient Care • AVAI • Sep 24, 2024 8:00 AM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • ELMGF • Sep 18, 2024 10:29 AM