Alphabet grew more than expected in Q1, but its ad business saw “significant slowdown” in March
Today after the bell, Alphabet, parent company of Google, reported its Q1 2020 performance. The company’s $41.16 billion in revenue for the three-month period came in ahead of expectations, besting analyst estimates of $40.33 billion. However, its earnings per share came in under expectations, with the street anticipating $10.38 in per-share profit, while Alphabet delivered a slimmer $9.87 in per-share income.
Shares of Alphabet rose around 2.8% in after-hours trading after shedding 3.3% in regular trading.
Inside Alphabet’s earnings report was a warning of sorts, with its CFO Ruth Porat noting a decline in later-quarter business, saying “performance was strong during the first two months of the quarter,” but that in “March [Alphabet] experienced a significant slowdown in ad revenues.”
Google generates the bulk of Alphabet’s revenue and profit, which are, in turn, largely generated by advertising incomes. Indeed, the company’s advertising revenue from search, YouTube, and its network generated 82% of its revenue in the first three months of the year.
Alphabet’s various skunkworks projects dubbed “Other Bets” generated less revenue than in the year-ago quarter, bringing in just $135 million in Q1 2020, down from a year-ago result of $170 million. Off of that revenue decline, Other Bets saw its operating loss rise from a mere $868 million to $1.12 billion.
The company’s mixed results, and note about declining business quality in March may not assuage investors worried about broader economic deterioration due to COVID-19 and its ensuing economic impacts; advertising-based businesses are struggling in the wake of the pandemic and a decline in consumer and business spend, which has torched advertising outlays.
Today after the bell, Alphabet, parent company of Google, reported its Q1 2020 performance. The company’s $41.16 billion in revenue for the three-month period came in ahead of expectations, besting analyst estimates of $40.33 billion. However, its earnings per share came in under expectations, with the street anticipating $10.38 in…
