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Photo by Jaap Arriens/NurPhoto via Getty Images

Stock for Google's parent company, Alphabet, was up nearly 4% in after-hours trading Tuesday after the company reported that it beat Wall Street expectations for total revenue.

Yes, but: Despite beating expectations on revenue, the company still reported a slowed advertising growth rate compared to last quarter, due to the decline of the ad market caused by the coronavirus. Google makes the vast majority of its total revenue from ads.

Why it matters: Investors were eager to see how well Google would fare this quarter, given that it's by far the largest advertising-based company in the world.

  • Google's results signal some relief to investors in the ad-based tech sector, although analysts still predict a very rocky road ahead for advertising-based companies.

By the numbers, via CNBC:

  • Earnings: $9.87 per share, adjusted versus $10.33 per share expected
  • Revenue: $41.16 billion verses $40.29 billion expected by Refinitiv
  • Traffic acquisition costs: $7.45 billion versus $7.51 billion per FactSet estimate
  • Cloud revenue: $2.78 billion
  • YouTube advertising revenue: $4.04 billion

Be smart: First quarter revenues don't reflect a full quarter of economic impact from the virus crisis. Many of these companies didn't begin to experience major ad pullback until March, when stay-in-place orders began.

  • Google in particular has been hit heavily by the reduction in ad spending by travel companies like Expedia and Booking Holdings (owner of booking.com and kayak.com).

Go deeper

Ben Geman, author of Generate
Aug 5, 2020 - Energy & Environment

Electric vehicle startup Nikola claims progress but stock plunges

Illustration: Aïda Amer/Axios

Nikola Corp., a company planning to build electric and hydrogen fuel-cell trucks, posted an $86.6 million quarterly net loss Tuesday in what was its first earnings report after going public in June.

Why it matters: Nikola is attracting lots of attention for plans to build a line of semi-trucks, as well as a pickup, in the coming years as it tries to break through in those fledgling markets.

Dan Primack, author of Pro Rata
Aug 5, 2020 - Economy & Business

Why the employee retention credit is an overlooked stimulus issue

Illustration: Eniola Odetunde/Axios

D.C. remains deadlocked on the next stimulus package, days after extended unemployment benefits ended and days before PPP is set to expire.

Where it stands: One unresolved issue that hasn't gotten enough attention is a proposed expansion of the employee retention credit, which could have a significant impact for companies that have experienced severe revenue declines.

Dion Rabouin, author of Markets
Aug 5, 2020 - Economy & Business

Auto sales may have turned a corner

Illustration: Aïda Amer/Axios

U.S. auto sales have bounced back in recent months despite the coronavirus pandemic, with some brands even seeing their sales increase over 2019's numbers at this point in the year.

Why it matters: Cars and trucks were seen as one of the sectors that would be hardest hit as Americans were called to stay home from work and entertainment destinations were shuttered.