Alphabet’s Google Miss Revenue Estimates in Q4 Results but Beat Earnings Estimate

On Monday Google’s parent company Alphabet Inc. (GOOGL) reported its first quarter results under the leadership of Sundar Pichai, who took over as the company’s CEO back in December.

In the fourth quarter ended 31 Dec, 2019 the company failed to beat Wall Street’s revenue estimate as it reported revenue of $37.57 billion versus the $38.38 billion estimated for the fourth quarter.

Nonetheless, the company however managed to beat Wall Street’s estimates in their earnings after postings earnings of $15.35 per share or a profit of $10.67 billion versus the estimate of $12.53 per share or a profit of $8.787 billion.

In the quarter, total costs and expenses rose to $36.809 billion signifying an 18.5% increase in comparison to what the company posted a similar quarter of 2018.

The firm attributes the rise in expenses to employing thousands of salespersons, marketing of Google via hardware among other ventures and establishments of new data centers.

Google’s YouTube generated $4.7 billion in the fourth quarter bringing the total amount generated by YouTube in 2019 to $15 billion. This was way below than the annual $25 billion which was expected from YouTube.

The search giant blamed this sharp target miss to currency exchange rates and the fact that it’s always updating new features on YouTube.

Revenue from Google’s cloud services in the fourth quarter was $2.6 billion which denoted a 53% quarterly revenue growth compared to revenue growth in a similar period a year ago.

This places Google’s cloud services behind its competitor Microsoft’s Corp. (MSFT) Azure, which during its quarterly reports last week Microsoft said it posted a 62% quarterly growth.

This is the first time Google has broken down revenue it has generated from YouTube and its cloud business, a move which has been applauded by many analysts.