Alphabet had net earnings of $13.9 billion, or $1.06 per share, on $69 billion of revenue for the three months ended on Sept. 30, the company reported today (Oct. 25). The quarterly profit represents a 26 percent decline from a year ago, showing the pain of an industrywide slowdown of advertising spending this year. Revenue grew 6.1 percent on a year-over-year basis, marking the slowest pace since 2013 (with the exception of one quarter at the beginning of Covid-19 pandemic.)
Both earnings per share and revenue missed Wall Street estimates. Analysts were expecting net earnings of $1.25 per share and revenues of $70 billion.
Alphabet share price fell more than 6 percent after the market’s close.
Google Search revenue grew 4 percent from a year ago to $39.5 billion for the quarter, while advertising revenue from YouTube fell 2 percent year-over-year to just above $7 billion, missing analysts’ expectation of $7.47 billion.
Another major chunk of Alphabet’s business, Google Cloud, fared better than expected, reporting $6.87 billion in quarterly sales versus the estimated $6.6 billion.
Operating margin, a key measure of profitability, was 25 percent, compared with last year’s 32 percent. Analysts were expecting 28 percent for the most recent quarter.