TECH

Alphabet has quarterly revenue above expectations

BANGALORE, India (Reuters) - Alphabet surpassed analysts' estimates in its first quarter results, as its Google unit recorded double-digit growth in advertising, despite the economic slowdown of the new coronavirus.
The company announced on Tuesday that it had a 13% revenue growth for the period, despite companies around the world having cut investment drastically due to the coronavirus.
Alphabet's revenue rose to $41.2 billion from $36.34 billion in the same period last year. Analysts, on average, expected Alphabet's revenue of $40.3 billion, according to data from Refinitiv.
Alphabet's profit for the quarter was $ 6.8 billion, or $ 9.87 per share, compared to analysts' average estimate of 7.21 billion, or $10.40 per share.
The booming economy and increased use of the Internet have led Google to record record revenues in recent years. But the virus has split these trends, with consumer spending now falling and dependence on internet services growing.
Alphabet's chief financial officer, Ruth Porat, told analysts the second quarter will be difficult for the advertising business, with customers cutting advertising spending.
While Google tools, including Duo video chat and YouTube, have become essential for many users this year, the company generally doesn’t charge for them and generates revenue-generating ad tools in addition to links, banners and commercial services in their services and those of partners.
But more than 26 million people have applied for unemployment benefits in the past month in the United States, Google's largest ad sales market, erasing all of the country's job gains in the past decade. Google's ad business generated about 83% of Alphabet's revenue last year. This line tends to accompany the economy in general, which explains Alphabet's slower revenue growth in the first quarter.
Google's ad sales were $33.8 billion, up 10% from the first quarter of last year.
About 5.5% of Alphabet's revenue last year came from cloud services for which Google charges companies, schools and governments. This year, the company extended several free offers to help customers affected by the pandemic.
The cloud business generated $2.8 billion in revenue, an increase of 52% over the previous year. Total costs and expenses rose about 12% compared to 33.2 billion.
The company reduced hiring, internship programs, marketing, office expansion and other spending plans. Just three months ago, the company signaled that it would accelerate overhead to add more employees to its cloud businesses and other areas where it is challenging to bring down dominant competitors.

Munsif Vengattil