Shares in Google parent firm Alphabet fell back from record highs in after-hours deals after its latest revenue figures were lower than estimates.
Analysts cited revenue and operating margin statistics covering the tech firm’s first quarter for the stock decline of more than 6% in the hour after the results were revealed.
The company said total revenue was up 17% – the slowest rate for three years – at $36.34bn in the first three months of the year compared to the same period in 2018.
The market was forecasting a total of $37.3bn, according to financial technology specialists Refinitiv and experts said any miss was likely to be punished when shares – up more than 23% in the year to date – were trading at record highs.
Alphabet had a market value of almost $890bn when trading on the regular market concluded – up 1.5% on the day in anticipation of a strong set of numbers following the likes of Facebook and Microsoft.
Net income, a bottom line profit figure, was $6.7bn compared to $9.4bn a year earlier.
The figure included, the company said, the impact of the $1.7bn fine imposed by the European Commission for anti-competitive advertising restrictions on websites using Google’s search widgets.
Costs hit almost $30bn – a rise of 17% – as it continued to spend big on things like data centres.
Other pressures have included scrutiny on the company’s privacy practices and efforts to restrict advertising on potentially offensive content.
Alphabet revealed staff numbers had rocketed, with the company employing over 103,000 at the end of the reporting period compared to 85,000 12 months earlier.
One of the key metrics analysts and investors were looking for was the operating margin – key to profitability.
That figure came in at 18% compared to 25% a year ago.
Alphabet, the world’s largest seller of internet ads, cited weaker paid clicks growth as being among the challenges but said there was much to cheer overall.
It does not break out performances by brand, such as YouTube.
Ruth Porat, chief financial officer, said: “We delivered robust growth led by mobile search, YouTube, and Cloud with Alphabet revenues of $36.3bn, up 17% versus last year.
“We remain focused on, and excited by, the significant growth opportunities across our businesses.”
Source: SKY NEWS