Alphabet (GOOGL) - Get Report shares rose after earnings, after the search giant posted better-than-expected revenue, even while acknowledging advertising revenue began dropping off due to coronavirus.
The stock rose 3.54% to $1,276 in after hours trading. The stock, after enjoying a solid run-up since April 9, had lost some in the past few days and fell 3% Tuesday in regular trading hours. This was after some analysts flagged what they viewed to be overly optimistic views on advertising spend in the wake of the epidemic, as brands spend on marketing less because of lower revenues.
Here were the results:
- Revenue: $41.16B v. analysts estimates of $40.82B
- Adjusted EPS: $9.87 v. $113.43
- Operating Margin: 19% v. 20.4%
Revenue growth was 13% year-over-year, while earnings fell over the same quarter last year. Cloud revenue, a new source of growth of late, was $2.7 billion and grew 52% year-over-year. YouTube ad revenue was a bright spot in the quarter, helping to boost ad revenue with a 33% growth rate year-over-year.
Google did’t say which costs pressured earnings.
Chief Financial Officer Ruth Porat said the quarter was humming along well until lockdowns began in March, pressuring ad spend.
Guidance is given on the earnings call.
Investors may be encouraged at the now diversified company’s ability to grow revenue to expectations in the wake of a crisis. Second quarter results will likely contract year-over-year, according to FactSet consensus estimates.