Alphabet reported revenues of $32.3 billion with non-GAAP earnings of $9.70 per share. The company took a GAAP loss of $4.35 per share. Analysts estimated average earnings of $9.96 per share on revenue of $31.85 billion. With the miss on earnings, stock has dropped over 5% in after-hours trading.
Google’s ad revenue is up year-over-year, from $22.3 billion to $27.2 billion. Despite better-than-expected revenues, Alphabet did pay a $2.7 billion anti-trust fine to the European Commission in the fourth quarter. It also paid a $9.9 billion “one-time transition tax on accumulated foreign subsidiary earnings.”
Last quarter, YouTube was embroiled in controversy over the weird and, at times, inappropriate content that wormed its way onto the platform’s kids’ network. In January, the company faced criticism over top talent Logan Paul posting a video of someone who had committed suicide. The company issued Paul a “strike” for violating its code of conduct and also put his projects on hold. Meanwhile, the platform is trying to address its role in spreading disinformation or supporting content that might harm people. The company has since vowed to hire 10,000 people to propel its moderation efforts.
This is part of a larger industry trend wherein consumers are holding platforms like YouTube accountable for the content it hosts.
Alphabet’s “Other bets” remains its most propitious sector, including Google Fiber, Nest, Verily, and Waymo, its self-driving car unit. In the final quarter of the year, this sector not only grew revenues, but it was also able to slightly stem losses.
Two other announcements of note: Alphabet is repurchasing 8.6 billion shares of class C stock. The company also appointed John L. Hennessy, a member of the board since 2004, to serve as chair of Alphabet’s board.RR