Alphabet misses on earnings as YouTube shrinks; company will cut headcount growth by half in Q4

Alphabet misses on earnings as YouTube shrinks; company will cut headcount growth by half in Q4

  • Alphabet missed analyst expectations on the top and bottom lines.
  • Revenue at YouTube declined, while analysts were expecting growth of about 3%.
  • Total growth of 6% marked the weakest period of expansion since 2013, other than one period during the pandemic.

Alphabet shares dropped about 7% in extended trading on Tuesday after the company reported weaker-than-expected earnings and revenue for the third quarter and said it would significantly decrease headcount growth.

  • Earnings per share (EPS): $1.06 vs. $1.25 expected, according to Refinitiv estimates.
  • Revenue: $69.09 billion vs. $70.58 billion expected, according to Refinitiv estimates.
  • YouTube advertising revenue: $7.07 billion vs $7.42 billion expected, according to StreetAccount estimates.
  • Google Cloud revenue: $6.9 billion vs $6.69 billion expected, according to StreetAccount estimates
  • Traffic acquisition costs (TAC): $11.83 vs $12.38 expected, according to StreetAccount estimates

Revenue growth slowed to 6% from 41% a year earlier as the company contends with a continued downdraft in online ad spending. Other than one period early in the pandemic, it’s the weakest period for growth since 2013.

YouTube ad revenue slid about 2% to $7.07 billion from $7.21 billion a year ago. Analysts were expecting an increase of about 3%. Alphabet reported overall advertising revenue of $54.48 billion during the quarter, up slightly from the prior year.

https://www.cnbc.com/2022/10/25/alphabet-googl-q3-2022-earnings-.html


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