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Google Stock Drops On Earnings Miss: TikTok Emerges as YouTube Rival



Google Stock Drops On Earnings Miss TikTok Emerges as YouTube Rival

(CTN News) – Google parent Alphabet (GOOGL) missed Wall Street estimates in its March quarter earnings and revenue. Google’s stock declined as YouTube advertising growth fell short of expectations amid rising competition with TikTok.

Alphabet said after the market closed that its first-quarter earnings declined 6% to $24.62 per share. The company lost $1.07 billion on equity investments, reducing profits by 99 cents per share.

According to generally accepted accounting principles, also known as GAAP, the company reports earnings.

Gross revenue increased by 23% to $68.01 billion. Analysts had predicted Google earnings of $25.74 per share on $68.05 billion in revenue.

The Google stock fell 4.4% to near 2,268 during extended trading today.

Google Stock: YouTube Revenue Misses Estimates

Compared to estimates of $5.73 billion, Google’s cloud revenue rose 44% to $5.82 billion.

YouTube advertising revenue increased 14% to $6.87 billion. Analysts also estimated YouTube ad revenue of $7.21 billion. TikTok’s advertising revenue has boomed with its short-form videos. That poses a threat to YouTube’s growth, analysts say.

Including traffic acquisition costs, net revenue was $56.02 billion versus estimates of $56.26 billion. Google paid $11.9 billion in traffic acquisition costs – what it pays to have users directed to its websites. Those figures surpassed the $11.69 billion estimate.

The company announced that the board of directors of Google has approved another $70 billion of stock repurchases.

Google Shares Down 17% This Year

In the first quarter, the company repurchased $13 billion of Google stock, compared to $13.5 billion in the December quarter and $12.6 billion in the September quarter.

Our focus continues to be on investing in capex, R&D, and talent to support long-term value creation for all stakeholders, Alphabet Chief Financial Officer Ruth Porat said in the earnings release.

Ahead of Google’s earnings report, its stock had shed 17% in 2022 amid Nasdaq volatility. According to IBD Stock Checkup, Google stock holds a Relative Strength Rating of 57 out of a possible 99.

Check out the stock trading system and CAN SLIM basics if you’re new to IBD. Identifying chart patterns for issues such as Google stock is key to understanding investment guidelines.

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