Alphabet (NASDAQ: GOOGL) shares plummeted early Tuesday after Google’s parent company reported revenue that fell below analyst estimates for its first-quarter 2019. The drop wiped more than $60 billion off Alphabet’s market cap.
Earnings per share for Alphabet registered $11.90 per share, ex-items, vs. $10.61 expected in a survey of analysts. Revenue came in at $36.34 billion, vs. $37.33 billion expected.
Traffic acquisition costs were $6.86 billion, vs. $7.26 billion expected, Paid clicks on Google properties were up 39%, and the cost-per-click on Google properties went down 19%
Google is seeing decelerating growth after consistently expanding at 20% or more in prior periods. Revenue increased 17%, down from growth of 28% a year earlier, and ad sales rose 15%, down from 24% a year ago.
Alphabet recorded a European Commission fine of $1.7 billion in the quarter as a settlement for stifling competition in the online ad sector. Excluding the fine, the company’s operating income rose 26% to $8.31 billion. Total cash and marketable securities rose 4% to $113.5 billion.
Google has pinned much of its future growth on the emerging areas of its business as cost per clicks decline. The company’s hardware and cloud businesses are included in Google’s "other revenues" segment, which saw a 25% increase to $5.45 billion.
Separately, Alphabet stands to gain billions of dollars from its investments in two of biggest tech IPOs this year: Uber and Lyft (NASDAQ:LYFT). It owns about 5% of each company.
Shares fell sharply, by $104.02, or 8%, to $1,192.18
