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Alphabet tops Q4 earnings expectations thanks to mobile search, ads

Google (the company still comprised of mobile and software products) continues to grow sales by billions. The Other Bets unit, however, is another story altogether.

Alphabet, the parent company above Google, published fourth quarter financial results after the bell on Monday.

The tech giant reported a net income of $4.923 billion, or $7.06 per share (statement).

Non-GAAP earnings were $8.67 per share on a revenue of $21.329 billion, up 18 percent year-over-year, when including traffic acquisition costs (TAC).

Wall Street was looking for earnings of $8.10 per share with $20.77 billion in revenue.

Excluding TAC, Alphabet delivered $17.3 billion in revenue, topping the target of $16.9 billion.

Ruth Porat, chief financial officer for both Alphabet and Google, attributed the better-than-expected results primarily to mobile search, YouTube and other digital advertising streams.

"We're excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people," Porat wrote in the earnings report, underscoring the divide between Google products and more innovative, moonshot experiments now compiled under the "Other Bets" umbrella.

Google revenues, which include more of the enterprise cloud, software and data management products, delivered the overwhelming bulk of Q4 sales with $21.178 billion in revenue -- also up 18 percent from the same time last year.

As for the Other Bets department encompassing Alphabet's healthcare-driven initiatives and longer-term projects such as self-driving cars, that unit posted $448 million over the entire course of 2015 with $3.5 billion in operating losses.

Nevertheless, analysts seem upbeat by the results regardless as Alphabet shares popped by eight to nine percent in the first few minutes of after-hours trading.

Alphabet showed signs of growth elsewhere on the balance sheet. For example, the workforce headcount stood at 61,814 at the end of December 2015 -- up from 53,600 at the end of 2014.

Gmail also stood out during the quarterly conference call. Following in the footsteps of Search, Android, Maps, Chrome, YouTube, and Google Play, now the cloud-based email service has surpassed one billion users as of last quarter.

"Of course, all of these products are very popular and continue to grow rapidly on mobile," noted Google CEO Sundar Pichai, during the webcast.

Looking forward toward the first quarter, Wall Street is expecting a softer start to 2016 with targets calling for non-GAAP earnings of $7.83 per share with $19.92 billion in revenue.

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