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Google’s parent company suffers from slowing growth in the first quarter, declining profits | Associated Press

San Ramon, CA (AP) — Google’s parent company on Tuesday announced the slowest quarterly revenue growth since 2020.

For most companies, the numbers released by Alphabet Inc. are a reason for congratulations. However, tech companies are different in size, and investors usually measure them quarterly by how much they have grown compared to the previous year.

Alphabet started this year and its growth trend has dropped dramatically. This has already contributed to a 20% drop in stock prices, as tech stocks peaked at around $ 3,030 in early February, before they sold out widely. Equities fell another 4% in an extended deal on Tuesday after the latest quarterly figures were released.

Concerns over slowing growth are even greater as interest rates rise to curb the highest inflation rates of more than 40 years. Higher borrowing costs, coupled with the economic turmoil caused by the war between Russia and Ukraine, are likely to cool the US economy and create an even greater impediment to growth.

From January to March, Alphabet’s revenue totaled $ 68 billion, up 23% from the same period last year. This is the first time since 2020 that the company has reported a year-on-year increase in revenue of less than 30%. This figure was about $ 40 million below the average analyst estimate surveyed by FactSet Research.

First-quarter earnings were down 8% from last year to $ 16.4 billion, or $ 24.62 per share. According to FactSet, this is well below analysts’ average forecast of $ 25.47 per share.

As always, ads flowed through Google’s dominant search engine and a vast network that meanders most of the digital economy. Google’s advertising revenue totaled $ 54.7 billion in the first quarter, up 22% from the same period last year.

Last year’s comparison was difficult for Google and various other tech companies. Their digital services and gadgets were in high demand during a pandemic where most people were forced to spend much more time at home due to government blockades and other restrictions.

Initially, Google was hit by financial turmoil, with quarterly revenues declining for the first time year-over-year in the first few months of the pandemic. However, the company, based in Mountain View, California, has rebounded strongly as the surge in e-commerce has spurred a flood of advertising.

But now that rise seems to be over, Alphabet is entering a more difficult year. The company’s stock is currently sluggish, and the company has announced plans to buy back up to $ 70 billion in its stock if it deems it appropriate.

Tom Johnson, Chief Digital Officer of WPP, said: Mindshare, a global media agency.

Alphabet Chief Financial Officer Ruth Porat reminded analysts at a conference call late Tuesday that the company made a 62% profit last year, slowing growth during the current April-June period. It seemed to be preparing for the next quarter. She said it would be a “severe” comparison that would be exacerbated by Google’s suspension of operations in Russia in protest of the invasion of Ukraine.

But at least Google isn’t facing as much pressure as other tech companies that were once high-flying, such as video streaming leader Netflix. First loss of subscriber More than 10 years earlier this year, after enjoying the growth of meteors at the beginning of the pandemic.

To regain the lost momentum, Netflix will crack down on subscribers who share passwords with freeload viewers and may start showing ads for the first time in a low-priced version of the service.

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Google’s parent company suffers from slowing growth in the first quarter, declining profits | Associated Press

Source link Google’s parent company suffers from slowing growth in the first quarter, declining profits | Associated Press

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