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Highlights
- Google's total fourth-quarter revenue of US$74.9 billion was more than the average estimate of US$71.652 billion.
- Its ad revenue rose by 32.5% to US$61.2 billion, against the average forecast of US$57.1 billion.
- Alphabet shares gained 43% over the past 12 months.
Google's parent company Alphabet Inc. (GOOG) reported another quarter of solid growth, capping the final three months of fiscal 2021 with a 32% jump in sales to US$75.3 billion despite antitrust hurdles.
Shares of Alphabet jumped more than 7% in after-hours trading.
The results beat the average analysts' forecast of US$72 billion, according to EODHD/Others data. In addition, the revenue of US$74.9 billion was more than the average estimate of US$71.652 billion. The search giant's advertising, hardware, and cloud computing segments benefited from holiday shopping.
It was the company's third-straight quarter of record sales.
The company also announced a 20-for-one stock split, in which shareholders, as of July 1, 2022, will receive additional 19 shares, subject to the shareholders' approval for the split.
Alphabet CFO Ruth Porat said the company aimed to make shares available to more buyers.
Google, which generates most of its revenue from internet ads, said it lost some sales because of companies' product-trimmed budget and new iPhone privacy measures during the third quarter.
In the latest quarter, however, its ad revenue rose by 32.5% to US$61.2 billion, against the average forecast of US$57.1 billion. Analysts expect Google to continue its lead in internet ad sales over its rivals. Its secondary businesses, including Cloud, also lifted the overall sales.
Cloud revenue rose 45% to US$5.5 billion, higher than the expected US$5.4 billion. Alphabet's quarterly profit surged to US$20.6 billion or US$30.69 per share, above estimates of US$27.56 per share. Also, its fiscal 2021 profit increased by 89% to US$76 billion, while sales rose by 41% YoY.
Its cash reserve increased by nearly US$3 billion to US$139.6 billion in 2021, Reuters reported.
Alphabet shares gained 43% over the past 12 months.
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Source: Pixabay
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Google’s Regulatory Hurdles
Google faces regulatory challenges in the US and Europe against its search, ad-tech, and app-store businesses. It also faces allegations of secretly collecting customers' location data.
The US and the European Union plan to bring laws to curtail its market dominance. The proposed US regulations aim to limit Google's ability to preference its own businesses and force it to divest its ad-tech unit.
Alphabet (GOOG) caps blockbuster year with strong sales, declares stock split || Breaking News
These challenges would increase its legal expenses and discourage it from going for acquisitions that could invite regulators' ire, say analysts. Wall Street Journal reported that the company could be forced to discontinue some of its business to comply with the court rulings or new laws.
Over the past quarter, much of Google's revenue came from e-commerce ads as businesses moved online to overcome the pandemic disruptions. The tech giant had partnered with the e-commerce firm Shopify Inc. to simplify the search listings and ad purchases for merchants.
Google has been increasingly under pressure from investors to diversify its business, although its digital-ad segment still accounts for over 80% of total sales. It is investing in a cloud-computing unit to compete with established players like Amazon.com and Microsoft.
