Record Sales For Google Parent Despite Fights With The ACCC
Despite fights with the Australian Competition and Consumer Commission and the splashing of millions, with Australia’s big media Companies Google has still manage to shatter sales records in the last quarter.
Alphabet, Google’s parent Company has benefited from a massive surge in digital ad spending that has not only strengthened the tech heavyweight, but it’s also exposed them to high level scrutiny from Governments in Europe Australia and the USA who are trying to curtail their power.
As consumers shifted their lives online during a stay-at-home year, brands responded by shifting ad spending from print, television and radio to Google which is a major problem for media Companies.
Alphabet reported first-quarter sales of US$55.31 billion, an increase of 34% from a year earlier when advertising sales with traditional media Companies plunged as the coronavirus crippled the global economy.
Profit more than doubled, with per-share-earnings far exceeding analysts’ expectations.
The company posted $31.88 billion sales from its signature products, including search, Gmail, and maps, a 30% increase that reflected the way brands are spending to reach people online the WSJ reported.
YouTube pulled in $6 billion, increasing 49% from a year earlier.
Google said it would repurchase an additional $50 billion in shares, fulfilling the wishes of investors who had been monitoring the company’s swelling cash reserves.
Alphabet shares gained more than 4% in after-hours trading in New York this morning.
Over the last year, people have turned to Google Search and many online services to stay informed, connected, and entertained. We’ve continued our focus on delivering trusted services to help people around the world,” Alphabet Chief Executive Sundar Pichai said in a statement disclosing the results overnight.
The company’s board also authorized the repurchase of up to an additional $50 billion of its Class C capital stock.
Google’s Cloud revenue improved 46% to $4 billion, though the division lags behind rivals Amazon and Microsoft.
“Google has the wind at its back now,” said Sean Stannard-Stockton, chief investment officer at Ensemble Capital, a Burlingame, Calif.-based firm with $1.5 billion in assets under management that counts Alphabet among its largest holdings. “It didn’t just glide through Covid. It’s really well positioned and is even stronger,” he said.
The company continues to spend heavily to ensure Google remains the default search engine on iPhones and other devices. The toll fees, known as traffic-acquisition costs, rose 30% to $9.71 billion during the first quarter from a year earlier.
Google also has been spending to diversify beyond its core ad business with a cloud-computing service that challenges Amazon and Microsoft. The company has been trumpeting a bevy of billion-dollar deals in recent months that lifted sales at the division 46% to $4.05 billion in the quarter.
All financials are in US $