Google parent's first-quarter results top expectations
MOUNTAIN VIEW, Calif. - Google parent Alphabet (GOOGL) on Monday reported a jump in first-quarter net income on the back of strong digital ad sales and an accounting adjustment.
The Mountain View, California-based company's net income surged 73 percent to $9.4 billion, or $13.33 per share. Earnings, adjusted for nonrecurring gains including those from the accounting change, were $9.93 per share.
The results beat Wall Street expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of $9.21 per share.
The internet search leader posted revenue of $31.15 billion in the period. After subtracting Alphabet's advertising commissions, revenue was $24.86 billion, also beating Street forecasts. Eleven analysts surveyed by Zacks expected $24.2 billion.
"We have a clear set of exciting opportunities ahead, and our strong growth enables us to invest in them with confidence," said Ruth Porat, CFO of Alphabet and Google, in the earnings report.
Still, Google's sunny quarter comes amid the backdrop of looming privacy regulations in the U.S. and Europe.
Backlash over Facebook's (FB) "breach of trust" regarding Cambridge Analytica could spark U.S. regulation that would crimp political ad spending on Google properties including YouTube. The Federal Election Commission has begun to review rules concerning ads that directly support federal candidates, though that would not have prevented Russian meddling in the 2016 U.S. presidential race.
In Europe, the May 25 kickoff of the General Data Protection Regulation is forcing Google, Facebook, Slack and other U.S. companies to adopt policies that make consumers more aware of what data they're handing over to online services. If users around the globe get more squeamish about how their data is used, it could slow Google's ad-revenue machine.
But these clouds didn't seem to deter Alphabet investors who sent shares up in aftermarket trading on Monday following the earnings release. The shares were last trading 0.3 percent higher, or $3.32, to $1,077.13.