Google stock sinks after missing fourth-quarter earnings target
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Google's stock was down 5% in after-hours trading Thursday after the company reported that it missed on earnings per share. Google says revenues were negatively impacted by tax regulation that went into affect last month.
Why it matters: Google's core business is still healthy, despite content concerns on its media platforms, increased scrutiny from European regulators, and commerce threats from Amazon. Its advertising business grew and drove revenues to beat expectations.
The company is trying to lessen its reliance on advertising by diversifying into new areas such as cloud computing, which brought in more than $1 billion in revenue for the quarter.
New face: Former Stanford University president John Hennessy was appointed as chairman of the board, replacing Eric Schmidt, who recently left the role.
By the numbers:
- Earnings per share: $9.70 vs $9.98 expected by a Thomson Reuters estimate.
- Revenue: $32.32 billion (a 24% increase from a year ago) vs $31.86 billion Thomson Reuters estimate.
- Other bets: Alphabet-owned side projects (like Nest, Waymo and Verily) are not yet profitable, posting a $916 million operating loss on $409 million in revenue in the fourth quarter. But the loss narrowed over the year-ago quarter.
- Cost per click: The key metric for Google properties decreased 16% year-over-year, meaning that its ads were clicked more often, bringing prices down for advertisers.
- Cloud payoff: Google’s cloud business now generates more than $1 billion in sales per quarter, a notable milestone.
Correction: An earlier version of this post incorrectly stated that the company missed revenue expectations.