Parent Company of Google Reports Fourth Quarter Results and Smashes Estimates

11:27 02/10/2019

Alphabet Inc., the parent company of GOOG  Google, reported its fourth quarter results on February 4th and sailed past expectations on both earnings and revenue.

For the quarter, the company reported earnings per share of $12.77 in comparison to the $10.82 that was expected by analysts according to Refinitiv consensus estimates.

Revenue at $39.28 billion was also higher than the $38.93 billion that was expected according to estimates.

Traffic acquisition costs came in at $7.44 billion compared to $7.62 billion according to StreetAccount.

The company's cloud business and hardware sales division accounted for $6.49 billion during the quarter while analysts waited for $6.43 billion.

Full-year operating margin for Alphabet's core Google segment fell however over 2 percentage points from the previous year.

"Everything we do at Google is united by the mission of making information accessible and useful for everyone. Providing accurate and trusted information at the scale the Internet has reached is an extremely complex challenge and one that is constantly getting harder," said CEO Sundar Pichai.

According to Pichai, the company's cloud division is "one of the fastest growing businesses across Alphabet."

"Last year we more than doubled both the number of Google Cloud Platform deals over 1 million as well as the number of multiyear contracts signed," Pichai said. "We also ended the year with another milestone passing 5 million paying customers for our Cloud collaboration and productivity solution G Suite."

Pichai also said on the earnings call, "I wanna thank Diane Greene for her leadership over the last three years. Google Cloud is a fast-growing multi-billion-dollar business that supports major global 5,000 companies in every important vertical with a robust enterprise organization."

"This was not the case just three years ago. What Diane and her team accomplished is phenomenal. Now, Diane's work is done. And she has handed the reigns to Thomas Kurian. And I'm thrilled to have him here as our new Cloud leader.

Google Cloud closed out the year strong with momentum across the business. Last year, we more than doubled both the number of Google Cloud platform deals over $1 million as well as the number of multi-year contracts signed. We also ended the year with another milestone, passing five million paying customers for our Cloud collaboration and productivity solution, G Suite. Our focus on helping customers digitally transform their businesses is paying off. We continue to see strong growth in all our major geographies and industries this quarter. In financial services, we signed agreements with two of the top financial institutions in the US to help them transition their business to Google Cloud with our highly secure solutions."

Google has said that it will be replacing its head of Cloud, Diane Greene, with former Oracle executive Thomas Kurian.

"One of the things that was evident towards end of last year is now our ability to win very large customers, global 5000 companies with multiyear contracts. And so that's definitely something we want to focus on," Pichai remarked. "I think Diane and Thomas have been working closely under transition with a lot of continuity."0

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