Alphabet Rises as Q3 Profit and Revenue Beat Estimates

Alphabet shares were higher after the parent of the ads, search and cloud-tech giant Google posted stronger-than-expected profit and revenue.
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Shares of Alphabet  (GOOGL) - Get Report were higher after the parent to the advertising, search and cloud-technology giant Google reported that third-quarter net income rose 59% on 14% higher revenue, both stronger than Wall Street expected.

Alphabet earned $11.25 billion, or $16.40 a share, in the quarter, compared with $7.07 billion, or $10.12 a share, in the year-earlier quarter. Revenue reached $46.17 billion from $40.5 billion.

A survey of analysts by FactSet produced consensus estimates of third-quarter net income of $11.28 a share on revenue of $42.8 billion.

At last check, Alphabet shares were trading 6.3% higher at $1,657. They closed the regular Thursday session up 3.1% to near $1,557.

The revenue figure reflects higher spending from advertisers in search and the video platform YouTube “as well as continued strength in Google Cloud and Play,” said Ruth Porat, chief financial officer of Alphabet and Google, in a statement. Google Play is the company's application store.

The operating-profit margin in Q3 widened to 24% from 23%.

Search revenue rose 6.5% from a year earlier to $26.34 billion. YouTube ads generated revenue of $5.04 billion, up 32%.

The most recent major reports on Google have to do with federal and state governments' legal attack on the Mountain View, Calif., tech major.

The Justice Department, joined by a number of state attorneys general, recently filed an antitrust case against Google, in U.S. District Court in Washington. 

A key claim is that Google "unlawfully [maintains] monopolies in the markets for general search services, search advertising, and general search text advertising in the U.S. through anticompetitive and exclusionary practices."

The Justice Department and the attorneys general seek to "remedy the effects of this conduct."

In response, Google said the suit was "deeply flawed," arguing that "people use Google because they choose to, not because they are forced to or because they can't find alternatives."

Alphabet's chief executive, Sundar Pichai, also recently was subpoenaed by a Senate panel looking into what Republicans say is anti-conservative bias in major tech companies' platforms.

Jack Dorsey and Mark Zuckerberg, the CEOs of Twitter  (TWTR) - Get Report and Facebook  (FB) - Get Report, respectively, were also called to testify.

Internet companies have been shielded from liability for much of what their users post by Section 230 of the Communications Decency Act. 

Republicans call the law a license for the tech giants to effectively censor what appears on their platforms. 

Zuckerberg warned that “without Section 230, platforms could potentially be held liable for everything people say," while Dorsey said that "[removing] 230 will remove free speech from the internet."