Costco – Alphabet shares jump as Google sales top estimates
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Alphabet said Google Cloud posted a quarterly operating loss of US$1.24 billion. Google Cloud sales were US$3.831 billion, or US$13.059 billion for the full year, up 46 per cent from 2019.
The full-year Cloud operating loss widened 21 per cent to US$5.6 billion.
Over the last year, as Google Chief Executive Sundar Pichai added the title of Alphabet CEO, he has given investors greater clarity into the sprawling company’s performance. Before sharing Cloud costs and operating income, the company started disclosing Cloud and YouTube advertising sales.
Revenue from the Google Play mobile app store, YouTube subscriptions and consumer products is still lumped in to one category. Sales from small businesses Alphabet calls “other bets” including internet provider Google Fiber, artificial intelligence software maker DeepMind and health technology business Verily are separately grouped together.
Alphabet’s quarterly profit rose 43 per cent to US$15.2 billion, or US$22.30 per share, compared with the average estimate of US$10.895 billion, or US$15.95 per share.
Alphabet’s revenue, which for years had consistently increased by about 20 per cent annually, in 2020 increased by just 12.8 per cent. That marked its slowest growth since 8.5 per cent during the Great Recession in 2009.
The company remains undervalued compared with some rivals. Microsoft Corp shares entering Tuesday traded at 10 times expected revenue over the next 12 months and Facebook Inc. seven times, while Alphabet shares were about six times.
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