Stocks

Alphabet Inc (GOOGL) Earnings Miss, Revenue Beats, Stock Tumbles

Alphabet Inc (GOOGL) released its Q4 2017 earnings report after closing bell tonight. On a non-GAAP basis, Alphabet Inc (GOOGL) earnings came in at $9.70 per share on $32.3 billion billion in revenue. Analysts had been expecting $10 per share in GAAP earnings on $25.6 billion in revenue. In the year-ago quarter, the Google parent reported $26.06 billion in revenue.

Alphabet Inc (GOOGL) Earnings
Mizter_x94 / Pixabay

Alphabet Inc (GOOGL) earnings miss expectations

The non-GAAP Alphabet Inc (GOOGL)earnings exclude impacts from the tax reform bill, but including them, the Google parent posted a loss of $4.35 per share on an effective tax rate of 138%. Alphabet Inc (GOOGL) said that the tax reform bill resulted in a $9.9 billion additional tax expense in Q4 2017 for the one-time tax on overseas earnings to be repatriated. In Q4 2016, Alphabet Inc (GOOGL) earnings amounted to $7.56 per share on a GAAP basis.

“Our business is driving great growth, with 2017 revenues of $110.9 billion, up 23% year on year, and fourth quarter revenues of $32.3 billion, up 24% year on year,” Chief Financial Officer Ruth Porat said in a statement on the Alphabet Inc (GOOGL)earnings results. “Our full year operating income growth continues to underscore our core strength, and on top of this, we continue to make substantial investments for the long-term in exciting new businesses.”

Alphabet Inc (GOOGL) records growth across segments

Google Properties revenues rose to $22.2 billion from $18 billion a year ago. Google Network Members’ Properties revenues rose to $5 billion from $4.4 billion a year ago. Google ad revenues increased to $27.2 billion from $22.4 billion a year ago. Google other revenues grew to $4.7 billion from $3.4 billion a year ago. Google segment revenues totaled $31.9 billion, up from $25.8 billion a year ago, while Other Bets revenues grew to $409 million from $262 million a year ago.

Traffic acquisition costs increased to $6.45 billion from $4.85 billion a year ago. TAC as a percent of Google Network Members’ properties revenues increased to 74% from 70% a year ago. Aggregate paid clicks increased 43% year over year, while paid clicks on Google properties grew 48%. Aggregate cost per click fell 14% year over year, while cost per click on Google properties fell 16%.

Alphabet Inc (GOOGL) stock tumbled in after-hours trades, falling by more than 3% to as low as $1,142 per share.