Alphabet Earnings Miss Forecasts, as a Key Google Ad Metric Stumbles
Google is in trouble with European regulators. Wall Street is not thrilled with it either.
The Silicon Valley company, which reorganized itself into a holding company called Alphabet last year, fell short of earnings and revenue forecasts on Thursday when it reported first-quarter results.
Revenue was up 17 percent to $20.26 billion. Net income was $4.2 billion, with earnings excluding certain items coming in at $7.50 a share, compared with analyst expectations of $7.96.
As soon as the news was out, the stock fell $40, or about 5 percent.
One culprit for the disappointing report: aggregate cost per click, a crucial measure of Google’s advertising business, fell 9 percent from 2015.
Nearly all of Alphabet’s revenue and all its profits come from the core Google search and advertising business. Revenue from what the company calls “Other Bets” was $166 million, more than double what it was in the first quarter of 2015. But losses for Other Bets rose to $802 million from $633 million.
Aside from the troubles in Europe — antitrust authorities there said this week that the company was unfairly using its Android mobile software to promote its products over those of rivals — the last year has been generally sweet for Google fans.
The company brought in Ruth Porat from Morgan Stanley as chief financial officer, a sign it wanted to rein in spending. The results for the second quarter of 2015 offered evidence that the core advertising business was succeeding on mobile, igniting one of the largest one-day jumps in capitalization for a Nasdaq stock ever. A reorganization in the fall that separated the core business from the ambitious “moonshots” was met with approval by investors and analysts.
该公司从摩根士丹利(Morgan Stanley)挖来了露丝·波拉特(Ruth Porat)担任首席财务官。这一迹象表明它想控制开支。2015年二季度的业绩证明，核心的广告业务正在移动端取得成功，促成了纳斯达克史上名列前茅的市值单日增幅。去年秋天，公司将核心业务和雄心勃勃的“登月”项目分离，而这一重组得到了投资者和分析人士的一致支持。
Euphoria cannot last forever, though, and recently some headaches have emerged. An inability to release new products has plagued an acquisition, the thermostat company Nest. Bought for $3.2 billion in early 2014, Nest has struggled to expand its product line amid corporate infighting.
Another question hanging over Google is its ventures in cloud computing. This is the growth market where Amazon is far ahead and Microsoft is mounting an aggressive challenge.
Google is far behind at No. 3, or perhaps even No. 4 after IBM, said John R. Rymer, an analyst at Forrester Research. Last fall, Google hired Diane Greene, an industry veteran, to run all of its cloud businesses.
弗雷斯特研究公司(Forrester Research)的分析师约翰·R·里默(John R. Rymer)称，谷歌远远落后，目前处在第三位，甚至是IBM之后的第四位。去年秋天，谷歌请来业内资深人士戴安·格林(Diane Greene)负责所有云业务。
“This is their third try to really become a cloud powerhouse,” Mr. Rymer said. “They certainly seem more serious this time, but we’ll have to see if they move beyond digital natives to airlines, utilities, trucking companies, governments — the enterprises where the real money is.”