Google First Quarter Ad Sales Increase 32%, Alphabet Profits Double – WSB-TV Channel 2
SAN RAMON, Calif .– (AP) – Google’s digital advertising network has returned to high gear, with its parent company reporting profits more than doubling after an unprecedented decline during the early stages of the pandemic.
The strong first-quarter advertising growth announced on Tuesday provides the latest sign that advertisers expect the economy to come back to life as more people get their COVID-19 vaccine and come out of the hospital. their pandemic cocoons.
This is especially true in the travel industry, a key part of the advertising market that dramatically cut spending last year after governments around the world imposed lockdowns to prevent the spread of the novel coronavirus.
Google’s vast digital advertising empire is now benefiting from this upturn, although company executives warned on a conference call that another bad turn in the pandemic could deter recent consumer follies that are also enticing advertisers to spend more.
“It is too early to say how sustainable this consumer behavior will be as economies recover and mobility restrictions are lifted,” said Ruth Porat, chief financial officer of Google’s parent company, Alphabet Inc. .
Google sales jumped 32% from the same period last year to nearly $ 45 billion during the January-March period. This is the third consecutive quarter of acceleration in ad growth for Google after falling 8% during the April-June period of last year. It was the first time that Google’s quarterly advertising revenue had fallen from the previous year since the company went public in 2004.
The resurgence has made it easy for Alphabet to outperform analyst estimates that help set investor expectations.
The Mountain View, Calif., Company earned $ 17.9 billion, or $ 26.29 per share, more than double what it said in the same period last year. Profit was inflated by an accounting change of $ 650 million, or 97 cents per share.
Total revenue, which also includes Google’s cloud hosting service and device sales, increased 34% from last year.
Analysts had forecast earnings of $ 15.76 per share on revenue of $ 51.5 billion, according to FactSet. The performance pleased investors, who pushed Alphabet’s stock up 4% in extended trading after the numbers were released.
Besides dropping ad revenue by a quarter, Google has mostly thrived throughout the pandemic as people have become more dependent on its services – a phenomenon that has bolstered other pillars of tech such as Apple, Amazon, Microsoft, Facebook and Netflix.
Alphabet shares are trading above $ 2,300, nearly double its price when the pandemic was declared 13 months ago. Alphabet’s market value is now close to $ 1.6 trillion. And if Alphabet’s shares follow the same path in Wednesday’s regular trading session, the stock will hit a new high.
Google critics argue that much of its success is due to anti-competitive practices linked to the dominance of its search engine, which has become the de facto gateway to the digital world. The complaints culminated in a series of lawsuits filed by US regulators last year in cases aimed at curbing Google’s ability to grow, or even force a disruption of its services.
But the main US Department of Justice lawsuit is not set to go to trial until September 2023, giving Google plenty of time to expand its tentacles even further while battling a case it says is not founded.
Google’s YouTube video site remains one of the fastest rising stars in the business, with ad revenue up 49% from last year to $ 6 billion. The company’s cloud computing service is also expanding rapidly; its revenues increased by 46% compared to last year.