Last Updated on October 25, 2023 by Robert C. Hoopes
Google’s parent company Alphabet has reported better-than-expected Q3 earnings, boosting investor confidence. Despite this, the stock suffered a decline in after-hours trade due to the underperformance of Google’s cloud business. The company’s revenue, excluding traffic acquisition costs, reached $64.1 billion, surpassing last year’s $57.3 billion and exceeding expectations of $63 billion. Adjusted earnings per share also exceeded analysts’ predictions at $1.55, compared to an expected $1.44 per share. However, Google’s cloud business fell short of Wall Street’s estimates, generating $8.41 billion in revenue instead of the anticipated $8.6 billion.
Notwithstanding the underperformance in the cloud sector, Google’s advertising business fared well, reporting $59.7 billion in revenue, surpassing consensus estimates of $58.9 billion. Sundar Pichai, Google’s CEO, expressed satisfaction with the company’s financial results and product momentum for the quarter. Pichai specifically highlighted advancements in AI-driven innovations as a contributing factor to their success.
The positive earnings announcement comes at a time when Alphabet is facing several legal battles and antitrust investigations. The Department of Justice has filed lawsuits against the company, and the European Commission has initiated efforts to break up Google’s ad business. However, the company remains focused on delivering strong financial results and maintaining its position as a leader in the tech industry.
These earnings results and ongoing legal battles will undoubtedly shape the future trajectory of Alphabet and Google. Investors will be closely watching how the company responds to the challenges and whether it can continue to innovate and expand in a highly competitive market. With AI-driven innovations as a key focus, Google aims to solidify its position in the industry while navigating through the legal obstacles it faces.