© Reuters. ALPHABET EXCEEDS EXPECTATIONS IN THE FIRST QUARTER WITH ADVERTISING REVENUES
by Paresh Dave and Arjun Panchadar
SAN FRANCISCO (Reuters) – Alphabet, the parent company of Google (NASDAQ:GOOGLE), reported on Monday sales and profit in the first quarter above expectations thanks to higher advertising revenues.
The action initially, an increase of 1% in electronic trading after the close was then erased its gains.
The results, however, have allayed the concerns of investors see the prospects of the group affected by investments in new activities beyond its core business of search engine.
The profit margins of the group also suffered in recent quarters from the launch of new expensive projects in cloud computing (cloud), and the hardware within its main subsidiary Google.
Profits have reached $ 9.4 billion (7.7 billion euros) in the quarter, representing 13,33 dollars per share against 6,56 billion (for 9.28 dollar per share) expected by analysts, according to the consensus Thomson Reuters I/B/E/S.
Of this total, 3,40 $ per share is attributable to a new method of accounting for unrealised gains on investments of Alphabet in startups like Uber Technologies
Out of these potential gains and other exceptional items, the adjusted earnings per share-spring of 9.93 $ per share against for 9.28 dollars expected by the consensus.
The advertising rates charged by Google have been supported by the demand from advertisers to appear on its search engine but also on its on-line video service YouTube and its millions of websites and applications partners.
Investors ‘ appetite for Alphabet has suffered as a result of concerns over its costs and a tightening of its regulatory environment, in particular because of the growing concern around the world about the control by the users of online services of their personal data.
The action Google had dropped from nearly 3.5% since the beginning of this year before beginning a sharp rebound last week in the run up to the publication of the results of the first quarter.
The advertising revenues in the global group totals $ 31.1 billion in the first three months of the year compared to $ 30.3 billion a year earlier.
Revenue from mobile applications and other activities such as cloud computing totaled $ 4.4 billion dollars over the period.
The operating margin, however, declined compared to last year, in part due to the inclusion of 2,000 employees in Taiwan in the framework of a cooperation agreement with HTC.
Google has also registered an acceleration of the increase of its costs related to the distribution of shares to its employees and to the acquisition of broadcasting rights for YouTube TV.
The leaders of the group have already said that some of its costs are expected to slow down this year.
(Marc Joanny for French service)