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At Google’s parent company, Alphabet, recent rapid growth is slowing down. Sales increased 23% year-on-year to $ 68 billion, Alphabet said Tuesday. Analysts expected something more. The group referred, among other things, to the aftermath of the Russian war in Ukraine: economic worries had partly slowed spending on online advertising in Europe.
At the same time, Alphabet also sees a statistical effect behind the lower growth figures: at the start of the corona pandemic, business plummeted and then quickly recovered. A year ago, compared to the weak first quarter, the jump in sales seemed higher, the advantage was 34 percent. Now the increases are naturally lower. CFO Ruth Porat warned that the effect would be even more pronounced in the current quarter.
In the last quarter, Google’s parent company earned $ 24.62 per share. Analysts had expected earnings of $ 25.75 per share. In the previous year period, Alphabet had posted an EPS of $ 26.29.
The bottom line is that profits fell from $ 17.9 billion in the same quarter last year to as much as $ 16.4 billion (€ 15.4 billion). Among other things, Google is investing heavily in competing with Amazon and Microsoft for the cloud services business. Advertising on Google remains the pillar of the Alphabet Group. Advertising business grew 22.3% yoy to $ 54.66 billion.
At the same time, YouTube advertising revenue increased a whopping 14% to just under $ 6.9 billion. The video platform competes with, among others, the Tiktok app, whose popularity has recently suffered from the effects of Facebook, for example. Google, on the other hand, notes that more than two billion users log on to YouTube every month and that short films in competing format are widely used.
In the cloud business, sales grew nearly 44% to $ 5.8 billion. The operating loss went from 974 to 931 million dollars.
In so-called “other bets,” which include Waymo’s self-driving car development and Verily’s healthcare research, sales increased from $ 198 million to $ 440 million year-over-year. The operating loss of the range thus remained almost stable with around 1.15 billion dollars.
Shares of Alphabet reacted on Wednesday with a temporary drop of 4.43% to $ 2,284.17.
Editing of financialen.net/dpa-AFX
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