Google’s parent company just reported a significant drop in profits
It has not been the best of earnings seasons for Big Tech.
First, Twitter reported advertising revenue that was well below what Wall Street expected. Then, Amazon followed suit that day, missing sales estimates and watching its stock crater. Now, it’s Google’s turn and—well, you know what they say: Three is a trend.
Alphabet, Google’s parent company, reported its third-quarter financial results this afternoon. It significantly missed estimates on earnings per share, which came in at $10.12 on revenue of $40.5 billion. Analysts were expecting EPS of $12.32 on revenue of $40.31 billion, according to a FastSet consensus cited by the Wall Street Journal.
Alphabet reported EPS of $13.06 during the same period last year, almost 30% higher than what we just saw.
The company’s revenue was up 20% over the same period last year and Google’s advertising revenues were a healthy $33.9 billion.
So what happened? It’s not easy to say. Alphabet cites a loss of $549 million in its vaguely named “other income” section, compared to positive revenue of $1.5 billion for that same section a year ago, which is a stark difference. Alphabet attributed much of that difference to “unrealized losses on equity investments that we hold,” so take that for what you will.
Alphabet’s shares were down about 2% in after-hours trading.
If Silicon Valley is still hoping for a miracle this week, at least it has two more chances to score. Facebook and Apple are both due to report their earnings on Thursday.
You can check out Alphabet’s full report here.