Google parent company Alphabet (GOOGL) posted a fourth quarter earnings miss on both the top and bottom lines as online advertising revenue continues to slump.
Alphabet reported Q4 earnings per share (EPS) of $1.05 U.S. compared to $1.18 U.S. that was expected by analysts, according to Refinitiv data.
Revenue in the quarter came in at $76.05 billion U.S. versus $76.53 billion U.S. that was forecast on Wall Street.
The quarterly results were particularly impacted by advertising revenue at YouTube, which Alphabet owns. YouTube’s Q4 revenue amounted to $7.96 billion U.S. versus $8.25 billion U.S. that was expected.
The Google Cloud unit also saw revenue slump in the October through December quarter, declining to $7.32 billion U.S. compared to $7.43 billion U.S. that was expected.
In addition to a drop in advertising spending, YouTube also faces growing competition from social media app TikTok in the short-form video category.
Revenue in Alphabet’s “Other Bets” unit that includes self-driving car unit Waymo as well as some nascent technology projects and the company’s venture arm rose to $226 million U.S., up from $181 million U.S. a year earlier.
In a call with analysts and media, Alphabet executives said that the company is focused on artificial intelligence (AI) going forward.
Google is experimenting with several AI products that could boost its search engine business. The company is feeling competition from the recently released AI-based ChatGPT.
Like other technology companies, Alphabet has announced thousands of jobs cuts and canceled multiple projects in recent months as it contends with a slowing global economy.
Alphabet’s stock has fallen 25% over the past year to $107.74 U.S. per share.
