Google Crashes Earnings; Amazon Stock Takes A Hit (GOOGL, AMZN)

Amazon AMZN Stock

Shares of Google-parent Alphabet Inc (NASDAQ:GOOGL) rallied $9.77 to $805.12 in extended-hours trading Thursday in New York’s Nasdaq after the company reported fiscal results for the third-quarter.

In its quarterly report, the search giant said it earned $9.06 per share, well above the $8.60 per share analysts were expecting. Revenue rose 20.2% from the same period a year earlier to $22.45 billion, above views for $22.04 billion.

It should be noted that Google’s ad revenue, which jumped by more than 18% to $19.82 billion in Q3, accounted for 89% of the company’s total income. In the meantime, Google’s revenue from its “Other Bets” segment, which includes things such as home automation products Nest, broadband business Google Fiber and Verily Life Sciences jumped by nearly 40% to $197 million. Operating loss came in at $865 million, 12% lower from $960 million in Q315. Furthermore, net income rose to $5.06 billion, or $7.25 GAAP diluted EPS for Class A and B common stock and Class C capital stock, from $3.98 billion, or $5.73 per share, a year earlier.

Paid clicks rose 33% on a year-over-year basis and 9 percent from second-quarter to third-quarter 2016.

CFO Ruth Porat called it “a great third quarter, with 20% revenue growth year on year, and 23% on a constant currency basis,” adding that “mobile search and video are powering our core advertising business and we’re excited about the progress of newer businesses in Google and Other Bets.”

Mountain View did not provide a Q4 forecast, but the consensus estimates call for EPS of $9.65 on revenues of $24.8 billion.

Google also approved a stock buyback program totaling just over $7 billion of its Class C shares.

Google shares currently print a year return of about 12%, and a year-to-date return of around 5%.

Amazon.com, Inc. (NASDAQ:AMZN) reported third-quarter EPS of $0.52 after the closing bell Thursday, compared to the consensus estimate of $0.82. Revenues increased 29% from last year to $32.71 billion versus $25.4 billion in third quarter 2015. Analysts expected revenues of $32.65 billion. Operating profit came in at $575 million, compared with $406 million on a year-over-year basis.

The e-commerce giant said its cloud business, AWS, did the heavy lifting in terms of profitability. That division had an operating income of $861 million on net sales of $3.2 billion. While the AWS results looked and indeed are strong as revenue grew nearly 55 percent y/y, they slowed from the 58% in the prior quarter and 78% a year earlier.

Meanwhile, sales in Amazon’s North American business saw operating income of $255 million from $186 million a year earlier on a sales base nearly six times as large. International sales of $10.61 billion rose by 28%, a growth rate of 4% from Q315.

Looking ahead, Seattle guided Q416 revenues of $42 billion – $45.5 billion, as compared to analysts’ expectations of $44.65 billion.

The report seems to have put the brakes on Amazon’s stock, which had surged 21 percent year-to-date. Ticker is currently down by nearly 50 points to $770 on 7.34 million shares.

About Ron Haruni 1036 Articles
Ron is the Co-Founder & Editor in Chief of Wall Street Pit. Web Site: Wall Street Pit

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