Alphabet's Quarterly Profit And Revenue Rose Against The Backdrop Of The Pandemic And Quarantine Measures
Google's parent company, Alphabet Inc, increased its net profit and revenue in the first quarter of 2020 due to the high demand for its services in the context of the pandemic. At the same time, the company's advertising revenue fell by 10% in March. The company predicted that the second quarter will be difficult for business as well.
In the reporting period, Alphabet's net income was $6.84 billion, or $9.87 per share, compared to $6.66 billion, or $9.5 per share, for the same period in the previous year. The figure for the first quarter of 2019 included one-time expenses for the payment of a fine by the European Commission for $1.697 billion. Alphabet's quarterly revenue rose 13% to $41.16 billion.
Experts polled by FactSet, on average, predicted the company's net profit in the first quarter at $10.71 per share on revenue of $40.8 billion.
"The results for the first two months of the first quarter were strong, but in March we faced a significant reduction in advertising revenue. We intend to focus on improving efficiency while continuing to invest in long-term opportunities," the company said in a press release.
They believe that given the continuing uncertainty, it is too early to talk about the timing of normalization of the situation in the economy.
Google's revenue in the first quarter rose 14% to $40.98 billion. Advertising revenue increased by 10% to $33.76 billion. Spending on traffic acquisition increased by 9% to $7.45 billion.
YouTube's advertising revenue jumped 33% to $4.04 billion, while Google Cloud revenue jumped 52% to $2.78 billion.
After the report was presented, Alphabet's chief financial officer Ruth Porat said in a conference call that the company will slightly reduce its capital investment in 2020, as well as slow down the pace of hiring new employees. At the same time, it will continue to implement the share repurchase program in accordance with the plans announced earlier.
Shares of Google rose by 7.5% in the course of trading on Tuesday. Since the beginning of this year, their cost has fallen by 7.7%.