QR.bizNewsAlphabet revenue falls for first time ever as ad sales slump

Alphabet revenue falls for first time ever as ad sales slump

Alphabet revenue dropped 2% from past year, the company announced in second-quarter earnings Thursday, beating Wall Street expectations a day after Google CEO Sundar Pichai appeared before the House Judiciary antitrust subcommittee to face allegations of anticompetitive behavior.

Google's ad sales have recovered since plummeting in March during the coronavirus pandemic, parent company Alphabet said on Thursday, easing concerns about its first quarterly sales slide in its 16 years as a public company. YouTube, the fastest-growing part of Google's advertising empire before the coronavirus set in, brought in $3.8 billion, 6% more than previous year.

The $38.3 billion that the company made in the given period is a two percent decrease from that of the second quarter of 2019. Overall, revenue fell 2% and was $31.6 billion excluding fees paid to partners, the Mountain View, California-based company said in a statement.

"We continue to navigate through a hard global economic environment", Alphabet CFO Ruth Porat said in a statement with the earnings report.

Second-quarter net income rung in at $6.95 billion or $10.13 in earnings per share (EPS), compared to net income of $9.9 billion in the same quarter past year or $14.21 in EPS.

Analysts had forecast Alphabet second-quarter revenue coming in at $37.36 billion with EPS of $8.34. Around that time, Alphabet CEO Sundar Pichai said Google would be pulling back on some of its investments for the rest of the year amid the Covid-19 crisis, starting with hiring. They closed at $1,538.37 in NY.

"This is particularly due to our decision to slow the pace at which we acquire office buildings in the near term, as we focus on reimagining the optimal work environment", Porat said.

Total Google advertising revenue fell to $29.86 billion in the second quarter, from $32.49 billion previous year. That rate of growth was lower than the 52 per cent the business saw in the first quarter.

Spending and hiring will continue for the cloud business, Porat said.

Pichai and the CEOs of Apple, Amazon and Facebook yesterday were grilled by USA congressmen during a hearing on their online platforms' market power and dominance held by the House Committee on the Judiciary's Subcommittee on Antitrust, Commercial and Administrative Law. Shares were essentially flat in after-hours trading following the release.

Image Bloomberg

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