Google owner Alphabet reported record-breaking profits and $50 billion (Rs 3,72,780 crore) in stock buybacks for the second consecutive quarter, but warned of usage during the pandemic as people resumed face-to-face activities And advertising sales may slow down.
As online consumer activity remained high in the first quarter, Alphabet exceeded analysts’ revenue expectations and almost exceeded the sales record set in the fourth quarter.
Compared with the first quarter, Google advertising sales in the first quarter increased by 32%, higher than the expectations of analysts tracked by Refinitiv. Cloud sales increased by 45.7%, in line with expectations.
In the extended transaction, Alphabet’s stock price rose about 4.3% to close at $2,390.10 (about 170,000 rupees).
The results show that Google’s search and YouTube services may continue to grow due to blockades and other pandemic restrictions that have forced people to shop and communicate online in the past year.
By the end of the first quarter, approximately 17% of the U.S. population (ranked first in terms of income) were fully vaccinated against COVID-19. Activities including in-person dining resumed in big cities in March, and security checks at US airports were the busiest day of the year.
But Alphabet’s chief financial officer Ruth Porat told analysts on Tuesday that “it’s too early to predict how far these changes in consumer behavior and advertising spending will continue.”
Google’s chief business officer Philip Schindler and Porat declined to comment on whether Google saw a rebound in travel and other industries (major customers) spending before the pandemic.
Alphabet’s overall quarterly sales increased by 34% to US$55.3 billion (approximately Rs 4,120,400 crore), higher than analysts’ estimates of 26% growth a year ago, and close to its reported US$56.9 billion (approximately 4239.6 Crores). The fourth quarter. Google acquired the smart watch maker Fitbit in January, thereby obtaining an undetermined amount of income.
Alphabet’s quarterly profit was US$17.9 billion (approximately Rs 1,333,380 crore), or US$26.29 per share (approximately Rs 1,960), exceeding the estimated value of US$15.88 per share (approximately Rs 1,180) and exceeding its previous highest Valued at 15.2 billion U.S. dollars (approximately 13.244 billion U.S. dollars). The figure for the previous quarter was Rs 1,13,264 crore.
However, nearly 4 billion U.S. dollars (approximately 29.8 billion rupees) in revenue came from unrealized gains from venture capital investments and recalculation of the depreciation of certain data center equipment.
Since its merger into Alphabet in 2015, high sales have increased operating profit margins by 30% for the first time, although its costs have started to rise again in terms of recruitment, legal affairs and construction of new facilities. In 2020, Alphabet experienced its slowest sales growth in 11 years, but posted record profits and increased its cash reserves by US$17 billion (approximately Rs 1,26,640 crore) following a slowdown in recruitment and construction.
The share repurchase authorized by Alphabet’s board of directors follows the announcement of a US$25 billion (approximately Rs 1,862,300 crore) repurchase program in 2019. Jefferies analyst Brent Thill estimates that Alphabet now has US$56 billion (approximately Rs 4,171,600 crore). ) Can be used to purchase shares of its shares.
Google’s advertising business is the global market leader measured by sales, accounting for 81% of Alphabet’s first quarter revenue.
Schindler said retail, technology and consumer product companies were the main search advertisers this quarter.
Google Cloud is a distant competitor to the cloud business of Amazon and Microsoft. Its operating loss in the first quarter was reduced by 44% to US$974 million (approximately Rs. 72.5 billion). But Porat told analysts not to gain too much from the decline, because one-off factors including depreciation are at work.
Last year, Alphabet’s stock price soared by 80%, ranking 184th among the S&P 500 companies. In the past year into Tuesday, the share price of top competitor Facebook has risen 62%, after the market rose 1.7%.
Although there have been some concerns about Google’s long-term prospects in recent years, no single factor has had a significant impact on sales.
The privacy and antitrust lawsuits against Google may take several years to resolve, which may lead to changes in its advertising operations.
Due to the distraction of lawmakers from the flu pandemic, discussions about changing U.S. and European laws to impose new oversight on Google, Facebook, and other companies, especially those about privacy and artificial intelligence, have lagged.
Nonetheless, problems continue to appear. On Monday, streaming TV technology company Roku accused Google of anti-competitive behavior to benefit its YouTube and hardware businesses. YouTube calls them “baseless claims.”
Thomson Reuters 2021 ©