- Alphabet beat on the top and bottom lines for the fourth quarter.
- The stock jumped in extended trading after the report.
- The company also announced a 20-for-1 stock split.
Google parent Alphabet reported better-than-expected fourth-quarter earnings and revenue. The shares popped more than 6% in extended trading.
The company also announced a 20-for-1 stock split that will go into effect in July.
- Earnings per share (EPS): $30.69 vs $27.34 expected, according to Refinitiv
- Revenue: $75.33 billion vs $72.17 billion expected, according to Refinitiv
- YouTube advertising revenue: $8.63 billion vs. $8.87 billion expected, according to StreetAccount
- Google Cloud revenue: $5.54 billion vs $5.47 billion expected, according to StreetAccount
- Traffic acquisition costs (TAC): $13.43 billion vs. $12.84 billion expected, according to StreetAccount
Alphabet reported revenue growth of 32%, proving again that it was able to withstand the pressures from the pandemic and inflation. The results follow a year of outperformance. The stock surged 65% last year, beating all other Big Tech companies and more than tripling gains in the S&P 500.
Google’s advertising revenue came in at $61.24 billion for the quarter, up 33% from $46.2 billion in the same period a year earlier.
The company’s cloud unit also beat estimates, with revenue rising 45% to $5.54 billion. The unit’s operating loss came in at $890 million during the quarter, which narrowed from the $1.14 billion loss it incurred a year ago. However, it expanded from third quarter, when the unit lost $644 million.
Revenue for the company’s Other Bets umbrella, which includes the company’s self-driving car unit Waymo and life sciences unit Verily, came in at $181 million — down slightly from a year ago.
Traffic Acquisition Costs (TAC), which is the metric used to describe what the company pays other websites to acquire traffic, came in higher than Wall Street expected at $13.43 billion.
The stock split doesn’t change the fundamentals of the business. Rather, it will lower the price of each share, a move that companies often make when the stock trades in the thousands of dollars. Were the split to happen as of Tuesday’s close, the cost of each share would go from $2,572.88 to $128.64, and each existing holder would get 19 additional shares for every one they own.