Alphabet reports Q4 results: ‘narrative at Google is powerful’

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Shares of Alphabet Inc (NASDAQ: GOOGL) jumped roughly 9.0% in extended trading after the tech giant reported better-than-expected results for its fiscal fourth quarter.

What the earnings report tells us?

Alphabet said its net income printed at $20.64 billion ($30.69 a share) versus the year-ago figure of $15.28 billion ($22.30 a share). At $75.3 billion, revenue noted a 32% annualised growth, as per the earnings press release.

According to Refinitiv, experts had forecast $27.34 and $72.17 billion in EPS and revenue, respectively. Cloud revenue was up 45% – ahead of the FactSet consensus. Advertising revenue jumped 33%, with $8.63 billion coming from YouTube versus a higher $8.87 billion expected.

Traffic acquisition costs (TAC) climbed to $13.43 billion from last year’s $12.84 billion. Operating margin moved up from 28% in the comparable quarter of fiscal 2020 to 29% in Q4. Also on Tuesday, the American multinational announced a 20-for-1 stock split, expected to take effect in July. Shares are now up 2.0% for the year.

Crockett reacts to Alphabet’s quarterly results

Applauding Alphabet’s strong performance in Q4 on CNBC’s “Closing Bell”, DCFStocks’ Barton Crockett said:

The narrative at Google is incredibly powerful. It’s well-positioned for what’s working right now. Nobody in large-cap is more insulated to Apple’s privacy moves. With the type of growth we’re looking at, in the next year or two, they very quickly be at a market multiple but with much better than market secular opportunity.

Amidst record levels of inflation, Alphabet is still allocating capital to fuel organic growth first and then to M&A, especially in the hardware and cloud space, confirmed CFO Ruth Porat in an interview with CNBC’s Deirdre Bosa. She, however, had no comments on metaverse at this point in time.

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