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Google parent Alphabet Q4 earnings: Revenue disappoints

Daniel Howley
Technology Editor

Google parent company Alphabet (GOOG, GOOGL) reported its Q4 2019 earnings after the closing bell on Monday, missing Wall Street’s expectations on revenue, but beating on earnings per share.

Here are the most important numbers from the report, and how they stack up to analysts’ predictions.

Revenue: $37.57 billion Ex-TAC versus $38.38 billion EX-TAC expected.

Earnings per share: $15.35 versus $12.49 expected.

YouTube: $4.7 billion.

Cloud: $2.6 billion.

The stock was down following the report.

This is the first earnings announcement since Sundar Pichai, who was previously CEO of Google, took over as CEO of Alphabet from Larry Page and Sergey Brin, who stepped down from their roles in December 2019. It also marks the first time that Google has broken out revenue for its YouTube and Cloud businesses.

Its cloud division is still running behind the likes of Amazon and Microsoft, bringing in $2.6 billion in the quarter. In its most recent quarter, Microsoft (MSFT) made $11.9 billion from its Intelligent Cloud business, which includes its Azure Platform.

Amazon’s (AMZN) Amazon Web Services, meanwhile, made $9.9 billion in the company’s most recent quarter.

Google CEO Sundar Pichai speaks on-stage during the annual Game Developers Conference at Moscone Center in San Francisco, California on March 19, 2019. (Photo by Josh Edelson / AFP) (Photo credit should read JOSH EDELSON/AFP/Getty Images)

Outside of Pichai taking the helm in December, Alphabet also acquired fitness tracker company Fitbit in November for just over $2 billion. During its earnings call on Monday, Alphabet may give analysts and investors insight into what exactly its plans are for Fitbit moving forward.

Of course, for Google it's all about the advertising. The company is the leader in the space alongside Facebook, and continues to grow. According to RBC analyst Mark Mahaney, Google accounts for more than 70% of global search ad revenue.

"At the margin, its market share has continued to increase, with its very strong position in Mobile and its ongoing innovation likely to continue to expand that share incrementally for the foreseeable future," Mahaney wrote in a research note ahead of the earnings announcement.

Google, however, is beginning to see increased competition from Amazon, which is pushing its way into advertising space, and could lead to a showdown with the search giant.

Like its big-name competitors, Apple (AAPL), Amazon (AMZN), and Facebook (FB), Google is staring down the barrel of potential antitrust trouble, as regulators continue to sniff around the company for evidence that it uses its monopoly power in search, advertising, and mobile to crush its competitors.

According to The Wall Street Journal, state attorneys general are meeting with representatives from the Department of Justice, which could result in the parties joining together in their investigation into Google.

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Got a tip? Email Daniel Howley at danielphowley@protonmail.com or dhowley@yahoofinance.com, and follow him on Twitter at @DanielHowley.

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