Alphabet fourth-quarter revenue, profit beat estimates

Alphabet fourth-quarter revenue, profit beat estimates

Alphabet Inc's fourth-quarter revenue and profit beat Wall Street's expectations on Monday but sharply higher spending, as it added data centres, cloud engineers and marketed its services heavily during the holidays, anxious investors. That compared to analyst estimates of $7.69-billion, or $10.87 per share. Only problem: Some higher expenses for spending on cloud engineers and data centers as well as YouTube content didn't thrill investors.

Alphabet Chief Financial Officer Ruth Porat told analysts that capital expenditures would moderate significantly this year, but the company would continue to invest in long-term bets on artificial intelligence services, consumer hardware and emerging markets. The company is spending some of that on buying back an additional $12.5 billion of its Class C shares. Losses in the category aren't uncommon since the other bets category is understood to be an umbrella for Alphabet's long-shot, experimental projects.

The report offered no detailed breakdown of Alphabet income but Google took in the overwhelming majority of revenue in the quarter, $39.1 billion, with $32.6 billion from advertising.

He did share one small nugget meant to highlight the success of one of its newest devices: one in seven Google Home devices activated during the holiday season was a Google Home Hub, Pichai said.

Revenue from Google's Other division, which includes cloud and hardware, rose 31 percent to $6.49 billion.

Online commerce grew quickly in the final quarter of 2018, helping Google's ad business. That's a 80 percent increase over its capital expenditures in the fourth quarter of a year ago.

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For starters, analysts believe Google will remain dominant in search.

For all that, investors apparently expected a little more operating income, which at $8.2 billion came in a bit short of the $8.6 billion consensus.

Amazon and Alphabet are increasingly competing for advertising dollars and in cloud computing. Thanks chiefly to its search ads as well ads on its YouTube video service, Google has 31.3 percent of the worldwide market to Facebook's 20.5 percent, according to eMarketer.

Other businesses, such as health venture Verily and self-driving start-up Waymo, were more disappointing at $154 million in revenue.

The latest earnings report showed that Google could earn plenty of money despite going through a year that ended with a troubled second half, racked with data privacy issues and sexual harassment scandals that inspired an employee walkout at Google. Operating loss for the unit was $1.3 billion, way up from $748 million a year ago.

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