INSUBCONTINENT EXCLUSIVE:
SAN FRANCISCO: Alphabet Inc shares rose about 8 per cent after the company reported quarterly results that eased investors' concerns about
growth challenges facing its Google advertising business.
Driven by ad sales, second-quarter revenue and earnings beat analysts'
In addition, the world's largest online search and ads firm, unlike No
2 online ad player Facebook Inc a day earlier, offered no worrisome guidance about increasing regulatory scrutiny.
The results helped
Alphabet dismiss as a rare blip a $1 billion revenue miss in the first quarter, which had prompted an outburst of investor questions and the
biggest one-day sell-off in its shares in about seven years.
In after-hours trade on Thursday, the shares rose to $1,226.60, on track for
their biggest single-day increase in four years though still down about 4 per cent from their high before the April slide.
Alphabet's shares
have lagged peers on Wall Street this year, rising about 9 percent through Thursday's close, compared to a roughly 20 per cent gain for the
S-P 500 broadly.
Questions linger about whether privacy, content moderation and antitrust rules proposed or already passed in the United
States and other high-revenue countries will slash ad prices
Google also faces an industrywide slowdown in ad sales in the United States and Europe, with revenue from emerging markets not yet picking
up the slack.
Google Chief Executive Sundar Pichai told analysts on Thursday that advances in ad targeting and new services for consumers
worldwide would spur growth
He said the company had survived calls for regulation before.
"We understand there will be scrutiny," and "we will engage constructively,"
he said.
WEAKENING CONCERNSAlphabet, which generates about 85 percent of its revenue from sales of ad space and ad technology, reported
total second-quarter revenue of $38.9 billion
That was up 19 per cent over last year and compared with 17 per cent growth in the first quarter
Analysts on average estimated 16.8 per cent growth and $38.2 billion in revenue, according to IBES data from Refinitiv.
The last time that
Alphabet had two consecutive quarters of revenue growth below 20 per cent was three years ago.
Executives said the latest results backed
their contention that the performance recently has been affected by currency exchange rates and one-off fluctuations rather than advertiser
flight or some deeper challenge to its business.
Alphabet's chief financial officer, Ruth Porat, appeared to dispel other analyst concerns,
saying the company has seen "virtually no impact" to revenue from efforts to stop running ads on YouTube videos that some have characterized
as extremist or hateful.
Alphabet authorized up to $25 billion in new stock buybacks, aiming to make use of its $121 billion in cash.
Pichai
said quarterly revenue from licensing cloud computing services and workplace software jumped to about $2 billion, from its last disclosure
of $1 billion at the end of 2017
He said the cloud unit would triple its sales staff over the next few years.
Atlantic Equities analyst James Cordwell told Reuters in an
email that the buyback and cloud updates "suggests that management cares about stock performance, which will be a relief to
shareholders!"
Net income for the second quarter rose to $9.95 billion, or $14.21 per share, compared with analysts' estimates of $8.02
The operating margin was 24 per cent, up from 18 per cent in the first quarter.
Alphabet in its earnings release on Thursday did not mention
any government investigations.
Facebook Inc, along with the release of its earnings on Wednesday, said the FTC had informed it last month
that it was under antitrust investigation
The social media giant also acknowledged a broad US Department of Justice antitrust review of large internet companies.
Reuters reported
last month that the US Federal Trade Commission was gearing up to investigate Google over complaints of anti-competitive
behavior.
Accusations lodged against Google by rivals and other critics span its advertising, app store, search and other businesses.
On
Thursday, the Texas attorney general's office announced that a bipartisan group of state attorneys general is weighing a range of antitrust
actions against big tech companies.