Google-parent company Alphabet (NASDAQ: GOOGL) reported its third quarter earnings on Thursday. The company beat bottom line projections but whiffed on revenue expectations and the stock sank Friday.
Earnings per share proved to be $13.06 versus $10.42 expected by a Refinitiv consensus estimate. Revenue, though, was $33.7 billion versus $34.04 billion expected.
Although Alphabet's overall revenues were up 21% year-over-year, chief financial officer Ruth Porat said on the company's earnings call that revenues were affected by the strength of the U.S. dollar in the third quarter.
Google's advertising business accounted for most of its revenue (85.8%, to be exact), hitting $28.95 billion in the third quarter, or a 20% increase year-over-year.
Among other revenues, including its cloud business and hardware sales, hit $4.64 billion, up 29% year-over-year. That's a less dramatic acceleration than last quarter's 37% increase.
Spending continued to increase. The company's accrued capital expenditures were $5.6 billion, which Porat attributed largely to data center construction projects and machines to increase its own compute. Meanwhile, the company's tax rate was 9% in the third quarter, down from 16% in the same quarter in 2017.
Alphabet's operating expenses were $11.1 billion, up 26% year-over-year, primarily driven by R&D expenses.
On Thursday, a bombshell New York Times story that said that Google shielded a handful of executives, including Android creator Andy Rubin, from sexual misconduct allegations and offered massive payouts to leave the company.
Shares in Alphabet plummeted $31.12, or 2.8%, to $1,072.47, in the first hour of trade on a turbulent Friday.
Tech Insider
