Shares of Google parent company Alphabet (GOOGL) are down 6% after the technology
company reported weaker-than-expected earnings and revenue for the third quarter.
Alphabet reported Q3 earnings per share of $1.06 U.S. versus $1.25 U.S. that was expected on
Wall Street, according to Refinitiv data. Revenue in the quarter amounted to $69.09 billion U.S.
compared to $70.58 billion U.S. that was expected.
Alphabet blamed the earnings miss, its worst in a decade, on YouTube advertising revenue that
came in at $7.07 billion U.S. compared to $7.42 billion U.S. that was anticipated.
Google Cloud’s revenue was better-than-expected at $6.90 billion U.S. versus a forecast of
$6.69 billion U.S., but it was not enough to offset declines in other areas of the company’s
business.
In an earnings call with analysts and media, Alphabet executives said they continue to struggle
with a decline in online advertising, notably at YouTube.
YouTube ad revenue fell about 2% in the quarter while analysts were expecting an increase of
3%. Alphabet’s results show continued weakness in the digital advertising market.
The company also announced cost-cutting measures going forward, including canceling the
next generation of its Pixelbook laptop and plans to close its digital gaming service called
Stadia.
The company also said it plans to reduce its headcount in coming months. Alphabet currently
has 186,779 employees worldwide.
Alphabet’s stock fell below $97 U.S. immediately after its earnings were announced. So far in
2022, Alphabet’s share price has declined 28%. The stock split on a 20-for-1 basis in July of this
year.
