GOOGL Stock: Google Earnings Top Earnings Estimates Amid Cost Cuts
Google Parent Alphabet (GOOGL) reported first-quarter earnings and revenue that topped estimates amid one-time expenses related to cost-cutting and higher investment income. GOOGL shares fell on Wednesday as the tech giant forecast higher capital spending in 2023 due to investments in artificial intelligence.
Reported after the market closed on Tuesday, Google earnings were $1.17 per share, down 5% from the same period last year. Google recorded $2.6 billion in one-time costs. The technology giant reports earnings under generally accepted accounting principles, also known as GAAP.
Furthermore, gross revenues increased by 3% to $69.79 billion.
Analysts had forecast Google earnings of $1.08 per share on revenue of $68.9 billion. A year earlier, Google reported earnings of $1.23 per share on revenue of $68 billion.
GOOGL stock: Higher capital spending
Meanwhile, ad revenue was roughly flat at $54.55 billion versus estimates of $53.8 billion.
“While internet search beat expectations and cloud was good enough, Google management populated the bear case with increasing AI compute intensity as they revised their investment outlook modestly for 2023,” RBC Capital analyst Brad Erickson said in a report.
GOOGL stock fell a fraction to close at 103.71 on the stock market today.
Google’s board of directors has approved an additional $70 billion in share buybacks. In the first quarter, the company bought back 14.6 billion dollars of its own shares.
YouTube pushed by TikTok
Meanwhile, YouTube ad revenue fell 2% to $6.69 billion, but topped views on lower expectations. Analysts had estimated YouTube ad revenue at $6.6 billion. TikTok’s growth has pushed YouTube.
Google said cloud data revenue rose 28% to $7.45 billion, missing estimates of $7.46 billion. Google’s cloud business had revenue growth of 44% in the same period last year.
The Big Tech stock had risen 19% in 2023 amid Nasdaq volatility.
GOOGL stock has a relative strength rating of 59 out of a possible 99, according to IBD Stock Checkup. Heading into Google’s earnings report, shares were trading 1% below an entry point.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on wireless 5G, artificial intelligence, cyber security and the cloud.
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