Alphabet Earnings Miss Forecasts, as a Key Google Ad Metric Stumbles
April 22, 2016
2016年4月22日Google is in trouble with European regulators. Wall Street is not thrilled with it either.
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.”
Google parent Alphabet scrutinizing 'other bets'
SAN FRANCISCO — Google parent
Alphabet is scrutinizing its "other bets," those speculative businesses that are now run separately from Google's lucrative advertising business.
"We continue to rationalize our portfolio of products to ensure we efficiently and effectively," Alphabet Chief Financial Officer
Ruth Porat said during the first-quarter earnings call on Thursday, hinting that poor performers may find themselves on the chopping block.
Other products or projects are not escaping scrutiny either.
"In certain areas where we have had multiple teams developing different approaches to a similar technology, we have been evaluating how to rationalize these approaches, enabling us to increase investments around a smaller, more focused set of opportunities," she said.
The remarks came as growing losses from the tech giant’s investments in speculative new businesses overshadowed Google's booming advertising business and caused the company to miss Wall Street forecasts.
Revenue from "other bets" doubled to $166 million, primarily generated by smart gadget maker Nest, life sciences research organization
Verily and speedy Internet provider Fiber. But the operating loss widened to $802 million from $633 million, spooking investors.
Recent reports suggest Alphabet is taking a hard look at certain investments such as robotics.
Porat reminded analysts that other bets are "pre-revenue."
"We continue to invest across these opportunities, doing so in a disciplined way," she said.