Alphabet Q4 Earnings Miss Expectations Due to Rising Costs

Company - Mohit Shah - Feb 02,2018

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alphabet q4 earnings miss expectations due to rising costs

Google's parent organization, Alphabet, reported its Q4 earnings which revealed lower figures after higher costs counterbalanced a big jump in advertising sales.

Alphabet stocks primarily dropped as much as 5 percent after the announcement of its disappointing Q4 earnings. However, the stocks bounced back as the firm’s earnings tend to settle around 2 percent down.

Google’s parent company displayed strong revenue development, but investors stay suspicious regarding rising costs and condensed margins.

Another issue of concern for the investors is focused at the big-name companies that have pulled their advertisements from YouTube since several reports of troubling content have been reported on the video platform. Last year, YouTube promised to hire thousands of fresh content moderators, with claims that advertiser response was positive.

Above all, Alphabet did miss Wall Street expectations, but was able to beat approximations on revenue. Moreover, it was Google's growth in its ads business that posted $27.27 billion (revenue) in Q4, which has eventually motivated Alphabet's growth.

Overall, the revenues of Alphabet for 2017 were found to be higher by 23 percent year-over-year, reaching $110.9 billion.

Google has been working to expand its catalogue by investing in several new ventures, such as expanding its cloud computing services, creation of self-driving cars as well as efforts in the health technology sector. Google chief executive Sundar Pichai mentioned on a conference call that, "We are focused on building a second wave of growth within Google over the medium and long-term”.  

Alphabet made another announcement about John Hennessy who will be the company's new chairman. Hennessy has been a board member since the past 12 years and acts as the successor to Eric Schmidt, who expressed his desire to leave the prime position in December.