Alphabet shares descend as fourth-quarter earnings were less

Company - Mohit Shah - Jan 27,2017

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alphabet shares descend as fourth quarter earnings were less

Google’s parent company, Alphabet, reported its fourth-quarter earnings on Thursday which turned out be less as per estimated figures.

It was noted that the company earned less per click on its different properties. Moreover, the company’s costs pulsed higher due to significant investments in talent as well as core business. 

The company posted its fourth-quarter earnings per share of $9.36, accommodated and excluding items, on revenues of $26.06 billion. 

The revenue topped expectations, which were primarily led by YouTube and mobile search, said chief financial officer Ruth Porat. However, a Google representative commented that YouTube has been slower to gather the slack from Google's other properties concerned with advertising. 

According to a consensus estimate, analysts expect Alphabet to report earnings close to $9.64 per Class A share on $25.26 billion in revenue. 
The event was followed by Alphabet shares diminishing by around 3% in after-hours trading. 

The cost of revenues rose to 41 percent from a year ago. Also, the company's traffic acquisition costs reached $4.8 billion during the quarter, higher from a year ago and greater than the $4.7 billion forecasted by a StreetAccount estimate. 
Adding more to Alphabet’s concerns, a tax-charge was reported which is related to stock-based compensation of $586 million, surely greater than the $316 million a year ago. 

Forrester analyst Thomas Husson said, it might be a slower growth but the mid-term prospect looks good considering the fact that “advertisers will wake up to the mobile Web opportunity.”

 Moreover, Google did not share specifics on the holiday season sales of its new Pixel phone as well as Google Home. According to managing director at Mizuho Securities, Neil Doshi, Google sold about 1 million Pixel phones during the quarter. 

CEO Sundar Pichai informed investors that the company was shocked with the reception of the Pixel and that the Google Home turned out to be a popular present during the holidays.