Alphabet Completed 4th Quarter with Net Profit


Alphabet Inc., an American Holding Company owned by Google, made a net profit and revenue in the fourth quarter of 2018 above expectations, but its shares fell down.

According to the Company’s press release, its net profit in October-December amounted to $8.948 billion, or $12.77 per share, compared to a net loss of $3.02 billion, or $4.35 per share, for the same period in 2017. The loss was due to changes in US tax law.

The adjusted profit in the last quarter amounted to $10.91 per share, which surpassed the average forecast of analysts polled by FactSet of $10.86 per share.

The Holding’s revenue increased by 22%, to $39.276 billion compared to $32.323 billion a year earlier. Excluding currency fluctuations, it grew by 23%.

Experts expected revenues on average of $38.9 billion.

Alphabet profitability on operating profit decreased to 21% from 24%.

Google’s revenue in the fourth quarter increased by 21.5%, to $39.122 billion. Operating profit increased by 12.9% reaching $9.7 billion. The bulk of revenues were due to advertising, which increased by 20%, to $32.365 billion.

The traffic acquisition cost (TAC) increased by 15%, to $7.436 billion.

The total number of paid ad transfers that Alphabet shows to users in October-December increased by 22% in annual terms, after a jump of 62% a quarter earlier. At the same time, the cost per click decreased by 9% after falling down by 28% in the third quarter.

Following the result of the end of 2018, Google’s capital expenses almost doubled and reached $25.46 billion.

Alphabet share price during an additional trading session on Monday fell down by 3.1% after the report publication. Last year, the Company’s capitalization increased by 2%, while the value of the American stock index Standard&Poor’s 500 decreased by the same amount during this period.

Alphabet is one of the largest global companies by capitalization; its market value exceeds $775 billion.