GOOGL Stock Falls On Q1 Earnings Miss As YouTube Growth Disappoints

Google-parent Alphabet (GOOGL) on Tuesday reported March-quarter earnings and revenue that missed Wall Street targets. GOOGL stock fell as YouTube advertising growth fell short of expectations amid rising competition with TikTok.

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After the market close, Alphabet said first-quarter earnings fell 6% to $24.62 per share. Google reported a loss of $1.07 billion on equity investments, reducing profit by 99 cents per share.

The company reports earnings under generally accepted accounting principles, also known as GAAP.

Also, gross revenue rose 23% to $68.01 billion. Analysts had predicted Google earnings of $25.74 per share on revenue of $68.05 billion.

GOOGL stock fell 4.4% to near 2,268 in extended trading on the stock market today.

Google Stock: YouTube Revenue Misses Estimates

Google said cloud-computing revenue rose 44% to $5.82 billion vs. estimates of $5.73 billion.

Meanwhile, YouTube advertising revenue rose 14% to $6.87 billion. Also, analysts had estimated YouTube ad revenue of $7.21 billion. Social media firm TikTok’s advertising growth has boomed via its short-form videos. That poses a headwind to YouTube’s growth, analysts say.

The company said net revenue, minus traffic acquisition costs, came in at $56.02 billion vs. estimates of $56.26 billion. Traffic acquisition costs — what Google pays to have traffic directed to its websites — jumped 23% to $11.99 billion. That surpassed estimates of $11.69 billion.

The company said Google’s board of directors has authorized $70 billion in additional stock repurchases.

Google Shares Down 17% This Year

In the first quarter, the company repurchased $13 billion of Google stock vs. $13.5 billion in the December quarter and $12.6 billion in the September quarter.

“We continue to make considered investments in capex, R&D and talent to support long-term value creation for all stakeholders,” Alphabet Chief Financial Officer Ruth Porat said in the earnings release.

Heading into the Google earnings report, the stock had shed 17% in 2022 amid volatility in the Nasdaq. GOOGL stock holds a Relative Strength Rating of 57 out of a best-possible 99, according to IBD Stock Checkup.

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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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