Google Parent Alphabet Posts Mixed Q1 Results After “Significant Slowdown” In Ads
Alphabet, parent company of Google, reported mixed quarterly results Tuesday, falling short of Wall Street profit estimates after a sharp downturn in the last month of the January-to-March quarter.
Total revenue rose 13% to $41.16 billion, well above analysts’ consensus forecast for $40.33 billion.
Earnings per share, though, came in at $9.87, below the Street’s target of $10.38.
“Performance was strong during the first two months of the quarter, but then in March we experienced a significant slowdown in ad revenues,” CFO Ruth Porat said. “We are sharpening our focus on executing more efficiently, while continuing to invest in our long-term opportunities.”
YouTube viewing has surged during the COVID-19 crisis and still accounts for the majority of mobile viewing. Marketers, even contending with the pandemic challenges, are still drawn to the ubiquity of the platform and its potential for targeting. YouTube’s ad revenue during the quarter shot up 33% from a year ago to a bit more than $4 billion.
Alphabet is the first of the tech giants to report earnings this week, revealing the first signs of the pandemic’s toll. While largely more insulated than companies in traditional sectors like retail, travel and the media business, technology firms nevertheless have placed huge bets on advertising, which has quickly softened in recent weeks. Most forecasters see digital channels as the quickest to recover after a pullback in ad spending in 2020 and beyond.
YouTube, along with Search and iCloud, paced the quarter’s performance, according to CEO Sundar Pichai. The exec said his employees have “marshalled our resources and product development in this urgent moment.”
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