Alphabet (NASDAQ:GOOGL) could be in for a tense day Tuesday, following the release Monday of quarterly earnings. The Google parent fell more than 2% after the bell Monday after posting $10.12 in profit for the third quarter, $2.34 less than expected.
Revenue registered at $33.01 billion excluding traffic acquisition costs versus $32.72 billion expected.
Google saw an increase in spending on research and development, sales and marketing, and general administrative fees in Q3 2019 compared to the same time last year.
The company has been stepping up its cloud initiative, as it attempts to catch up with market leaders Amazon and Microsoft. Google doesn’t break out its cloud earnings, but CEO Sundar Pichai announced during the Q2 2019 earnings call that the company had achieved an $8 billion yearly run rate for its cloud division.
Google is also expanding its sales force to sell its cloud products to big businesses. It doesn't matter that companies may already have contracts with Amazon and Microsoft, either, as the majority of the major cloud providers offer a certain level of interoperability. That means there's still room for Google to jump into the fray.
The company's recent hardware releases, including the Pixel 4 and Pixel 4 XL smartphones, won't have an impact on this quarter's earnings, as they were only released on Oct. 15.
Alphabet is coming off of a stellar earnings report in July, when it beat the Street and had its best day in four years. While regulation remains an overhang for the company, analysts are expecting Google Cloud, Google Search, YouTube, and revenue growth to keep things going.
Shares tumbled $23.33, or 1.8%, to $1,266.51
