Alphabet’s fourth-quarter revenue and earnings fell short of Wall Street expectations, as Google’s advertising business continues to face headwinds..
The tech giant reported revenue of $76 billion for the quarter ended Dec. 31, up 1% from the same period a year earlier but below analysts’ estimates of $76.47 billion. Earnings per share were $1.53, down 34% from the year-ago quarter and below the consensus estimate of $1.88..
Google’s advertising revenue, which accounts for the vast majority of Alphabet’s revenue, grew just 3.6% to $59 billion. This was the slowest growth rate for the company’s advertising business since 2013, and it marks the second consecutive quarter of decelerating growth..
The slowdown in Google’s advertising business is due to a number of factors, including the impact of the COVID-19 pandemic on businesses and consumers, the rise of ad blockers, and increased competition from other advertising platforms such as Amazon..
In addition to the challenges in its advertising business, Alphabet also faces headwinds in its cloud computing business. Google Cloud revenue grew 32% to $6.2 billion in the fourth quarter, but this growth rate is slowing down from the previous quarter..
Alphabet’s other businesses, which include hardware, software, and other services, reported revenue of $7.3 billion, up 7% from the year-ago quarter..
Despite the challenges in its core businesses, Alphabet is still a cash-rich company with a strong balance sheet. The company has $116 billion in cash and marketable securities, and it generates a lot of free cash flow..
Alphabet’s stock price fell 3% in after-hours trading following the earnings report. The stock is now down about 20% from its all-time high set in December 2021..
Analysts are mixed on Alphabet’s prospects. Some believe that the company’s advertising business will continue to face challenges, while others believe that Alphabet is well-positioned to weather the storm and continue to grow in the long term..
Only time will tell which view is correct. But for now, it’s clear that Alphabet is facing some challenges in its core businesses..
