Google Drops 6% on Disappointing Earnings

Shares of Google's parent company, Alphabet Inc., dropped 6% as it missed widely on its advertising revenue.
Oct. 25, 2022 21:54
Google Drops 6% on Disappointing Earnings

(CapitalWatch, Oct. 25, New York) The parent company of internet giant Google, Alphabet Inc. (Nasdaq: GOOGL), reported third quarter results showing revenue that missed estimates widely as its core digital advertising business fell short of lowered expectations. 

As a result, Alphabet stock dropped 6.3% to near $97.90 per share in extended trading today. 

The company reported net income of $13.9 billion, or $1.06 a share, in its fiscal third quarter, compared with net income of $1.40 a share a year ago. 

For the third quarter, analysts had predicted Google earnings of $1.26 per share on revenue of $71 billion.

Total revenue climbed 6% to $69.1 billion from $61.88 billion a year ago, the slowest year-over-year growth since sales declined in June 2020, while revenue after removing traffic-acquisition costs was $57.3 billion, compared with $53.6 billion in the year-ago period.

In particular, YouTube ad revenue fell nearly 2% to $7.07 billion amid growing competition from TikTok. Analysts had estimated YouTube ad revenue to be $7.5 billion. 

"There is no question we are operating in an uncertain environment," Alphabet Chief Business Officer Philipp Schindler said on the call.

Google's stock has dropped 28% so far this year while the S&P 500 index is down nearly 20% in 2022.