Google’s parent Alphabet Inc has missed Wall Street targets for first-quarter profit and revenue, driving shares of the web search company down more than 4 per cent in late trading.
Alphabet, the world’s No.2 publicly traded company by market capitalisation, said on Friday consolidated revenue rose to $US20.26 billion ($A26.18 billion) from $US17.26 billion. That was slightly below the $US20.37 billion analyst consensus, according to Thomson Reuters I/B/E/S.
Earnings per share of $US7.50, excluding one-time items, missed the analyst target of $US7.97.
Rosenblatt Securities analyst Martin Pyykkonen said the effect of foreign currency was worse for Alphabet than expected.
“If there had been a little better foreign currency translation, it would have been better than the Street consensus,” he said.
On a conference call after the earnings announcement, Alphabet Chief Financial Officer Ruth Porat said, “As a result of the ongoing strength of the US dollar, we realised a negative currency impact on our revenues year-over-year of $US762 million, or $US593 million after the benefit of our hedging program. Holding currency constant to prior periods, our total revenue grew 23 per cent year-over-year and declined 4 per cent sequentially reflecting holiday seasonality.”
Cost-per-click, or the average price of online ads, fell 9 per cent in the quarter ended March 31, although Pyykkonen said some analysts had been expecting a decline of 10 per cent.
Google’s advertising revenue increased 16.2 per cent to $US18.02 billion, while the number of ads, or paid clicks, rose 29 per cent, the company said.
Losses increased at the company’s Other Bets business, which includes its broadband business Google Fiber, home automation products Nest, self-driving cars and X – the company’s research facility that works on “moon shot” ventures.
The loss widened to $US802 million, up from $US633 million a year earlier. Revenue rose to $US166 million from $US80 million.
Alphabet’s net income rose to $US4.21 billion, or $6.02 per Class A and B share and Class C capital stock, from $US3.52 billion, or $US5.10 per share.
The company’s shares fell to $US744.21 in after-hours trade from a close of $US780.