Google earnings miss estimates as YouTube ad revenue drops

Google Father the alphabet (GOOGL) reported earnings and revenue for the September quarter that missed estimates, as its core digital advertising business fell short of low expectations. GOOGL stock fell on Google earnings news with YouTube ad revenue falling.


The internet search giant released Google’s earnings report after the market closed on Tuesday. Google said third-quarter profit fell 24 percent to $1.06 per share. The company reports earnings according to generally accepted accounting principles, also known as GAAP.

Total revenue rose 6% to $69.09 billion amid headwinds from currency exchange rates. In the same period last year, Google’s revenue increased 41%.

Analysts expected Google to earn $1.26 per share on revenue of $71 billion. A year ago, Google reported earnings of $1.40 per share on revenue of $65.1 billion.

“Google reported a blanket advertising error in the third quarter, in which Search, YouTube, and the Display Network were softer than expected, partially offset by a big cloud win,” Cowen analyst John Blackledge said in a report.

“Management noted tough comparisons (on an annual basis), declines in some advertisers, and worse foreign exchange rates,” he added.

GOOGL stock is down 6.6% to 97.56 in mid-morning trading in the stock market today. As Google’s earnings report approaches, shares of the big tech companies are down 27% in 2022.

GOOGL STOCKS: YouTube earnings drop

YouTube ad revenue fell nearly 2% to $7.07 billion amid increased competition from TikTok. GOOGL stock analysts estimated YouTube ad revenue at $7.5 billion, up 3.5%.

Morgan Stanley analyst Brian said: “While we remain optimistic about YouTube’s multi-year earnings opportunities around Shorts and its leadership in online television, it may take time for these products to meaningfully expand YouTube’s reach and impact given GOOGL’s focus on engagement rather than monetization and the environment. weakest college. Nowak in a report.

Meanwhile, total Google ad revenue rose 2.5% to $54.48 billion, below estimates of $56.58 billion.

Google said cloud computing revenue rose 37% to $6.87 billion, beating estimates of $6.7 billion.

Alphabet repurchased $15.39 billion of its stock, roughly the same as in the June 2022 quarter.

Google said it would slow hiring in the December quarter and in 2023. Google had 186,779 employees as of September 30, up 24% from the previous year.

Alphabet’s capital expenditures grew 7% in the third quarter to $7.3 billion.

“It is surprising to us that Google continued to hire and invest aggressively during the third quarter, given that macro trends were deteriorating,” EvercoreISI analyst Mark Mahaney said in a report.

GOOGL stock has a relative strength rating of 46 out of the top 99 possible, according to an IBD stock review.

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