Google looks more to what it can control
Subscribe to enjoy similar stories. Google might be the largest company in the world whose fate seems completely out of its hands these days, but the $2 trillion internet giant still has a few cards it can play. Some of them were on display in the third-quarter report from Alphabet, the parent company, late Tuesday.
Revenue and operating income beat Wall Street’s estimates thanks to strength in the company’s core search business and its cloud-computing operation. Google Cloud’s revenue jumped 35% year over year, up 6 percentage points from the growth rate shown in the last quarter and the best for the unit in two years. The unit produced operating income of $1.9 billion, which was 77% ahead of analysts’ consensus targets, according to FactSet.
Meanwhile, Google’s services segment, comprising search, YouTube ads, subscriptions and devices, generated operating income of nearly $30.9 billion, which was 9% ahead of expectations. It produced an operating margin of 40.3%—the highest since Alphabet began reporting profitability data for its core business going back to late 2019. Alphabet’s share price jumped nearly 6% in after-hours trading Tuesday.
The stock was well primed for some good news, having lost almost 7% of its value since the company’s last earnings report because of growing worry about blowout spending on artificial intelligence capabilities. While that is a concern hanging over Google’s mega-cap tech peers, Google is also contending with several antitrust cases brought by the federal government. The Justice Department is expected to file papers by Nov.
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