Google parent Alphabet misses Q3 revenue estimates as ad sales slow down

Google parent Alphabet misses Q3 revenue estimates as ad sales slow down

Google parent Alphabet misses Q3 revenue estimates as ad sales slow down

Wall Street was looking for earnings of $3.14 per share on revenue of $57.1 billion.

The company posted third-quarter earnings per share of $5.75 on net income of $2.9 billion, topping expected earnings per share of $3.14, according to Refinitiv data. Analysts projected $US3.9 billion.

She added, "It is not that the [Amazon] reported a decrease in income - on the contrary, profits were at a record high - but its sales nudged lower and more importantly its expectations for the all-important fourth quarter holiday shopping period came in a touch below consensus forecasts". Analysts had forecast $US3.11 per share. Shares of No. 2 online ad firm Facebook Inc, which faces questions about flattening usage limiting revenue growth, had fallen 12.5 percent and were trading at 19 times future earnings.

Alphabet's cost of revenue was $14.3 billion in the third quarter, up 28 percent from a year ago. The Street wanted to hear $73.79 billion, but Amazon forecast between $66.5 billion and $72.5 billion. Google's other revenue, which includes its cloud business, grew 29 percent on year, 4 percent below estimates of Cowen & Co. analysts.

In a time of low interest rates, Amazon and Google have offered investors the chance to hitch a ride on the fast-growing e-commerce, digital advertising and cloud-computing markets buoyed by a steady global economy, Bloomberg explained.

Worldwide net sales came to $15.55 billion, up 13 percent, with an operating loss of $494 385 million. A big reason behind that was the absorption of Whole Foods Market and the 87,000 people who work there. It was the second consecutive quarter that sales fell short of estimates and the first time for the back-to-back revenue miss in nearly four years.

"With consumer sentiment and employment rates near 18-year highs and ongoing store closures in the USA, we believe Amazon's strong retail sales growth will continue through the balance of the year and beyond", the analyst added. "We're very happy not only in the strong membership numbers", Olsavsky said Thursday, "but also in the continued strength of engagement" of Prime's shipping benefits and Prime Video.

The company now groups its advertising group under "other" on its balance sheet.

However, on Thursday night it said operating profits in the coming quarter could be as low as $2.1bn, flat with a year ago.

Amazon has already committed to invest at least $5 billion in India, and is expected to commit even more investments towards India, where it is now locked in a bruising market share battle against local rival and Walmart-backed Flipkart.

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