Google Alphabet plans to buy a record profitable online business of $50 billion

Google owner Alphabet made record profits for the second consecutive quarter and bought back the US $ 50 billion (Rs 3,72,780 crore) shares, but warned that as people resume face-to-face activities during the pandemic, Advertising sales and usage may decline. 

Consumer activity remained high in the first quarter and Alphabet beat analysts’ revenue expectations and nearly beat its sales record set in the fourth quarter. In the first quarter, Google’s ad sales increased 32% compared to the same period last year, which was higher than analysts’ expectations. Reset. Cloud sales increased 45.7%, in line with expectations.

Alphabet’s shares were up about 4.3% in the extended transaction to close at $ 2,390.10 (around 170,000 rupees). Online communication last year. At the end of the first quarter, in terms of revenue, about 17% of Alphabet’s highest-income regions in the United States had received full immunization against COVID-19. Activities, including in-person meals, resumed in major cities in March, and security checks at US airports were the busiest day of the year.

But Alphabet CFO Ruth Porat told analysts Tuesday that “it is too early to predict how far these changes in consumer behavior and ad spending will continue.” Google’s Chief Commercial Officer Philip ยท Schindler (Philipp Schindler) and Porat (Porat) declined to comment on whether Google’s spending on travel and other major customer industries has recovered before the pandemic. 

Alphabet’s overall quarterly sales rose 34% to the US $ 553 billion (approximately Rs 412.40 billion), higher than the 26% growth expected by analysts. A year ago, it was close to the US $ 56.9 billion (roughly Rs 423.96 billion) reported in the fourth quarter. Revenue benefited from an unspecified amount from Google’s acquisition of smartwatch maker Fitbit in January. 

Alphabet’s quarterly earnings were $ 17.9 billion (approximately Rs 1,333.8 billion), or $ 26.29 per share (approximately Rs 1,960), which beat expectations of $ 15.88 per share (approximately Rs 1,180). ), which is higher than the US $ 15.2 billion (approximately Rs 1,132,264 crore) in the previous quarter, but nearly US $ 4 billion (approximately Rs 298,800 crore) of earnings come from unrealized risks Income from investment Since the Alphabet merger in 2015, high sales have increased the operating profit margin for the first time by 30%. 

Although its cost has started to rise due to rent, legal issues, and the construction of new facilities, billing, and recalculation of some depreciation data center equipment. In 2020, Alphabet experienced the slowest sales growth in 11 years, but after the slowdown in hiring and construction, its profits set an all-time high and its cash reserves increased by US $ 17 billion (roughly Rs 1, 26,640 crores), and Alphabet’s board of directors approved The share buyback amount is the US $ 25. 

In 2019, a buyback plan of US $ 1 billion (approximately Rs 1,862,300 crore) was announced. Jefferies analyst Brent Thill estimates that Alphabet now has $ 56 billion (roughly Rs 4,171,600 crore) available to buy its shares.

Advertising business rebound:

As measured by sales, Google’s advertising business is the world market leader, accounting for 81% of Alphabet’s first-quarter revenue. Schindler said that retail, technology, and consumer products companies were the top search advertisers in the quarter. Google Cloud is a leading competitor in the cloud business of Amazon and Microsoft. Its operating loss in the first quarter was reduced by 44% to 974 million dollars (approximately 72,500 million rupees). 

But Porat told analysts not to benefit too much from the drop due to single factors like declines. Alphabet’s share price ranks 184th among companies in the S&P 500 and is up 80% last year. . From last year through Tuesday, the share price of Facebook’s biggest competitor rose 1.7%, after the market rose 1.7%. While there have been some concerns about Google’s long-term prospects in recent years, no single factor has had a significant impact on sales. 

Privacy and antitrust lawsuits against Google can still exist for several years, which can lead to changes in your advertising operations. Discussions about changing the US and European laws to impose new oversight on Google, Facebook, and other companies (especially on privacy and artificial intelligence) have been delayed because lawmakers have been distracted by the pandemic. 

However, the problem continues. On Monday, TV streaming technology company Roku accused Google of anti-competitive behavior to benefit its hardware and YouTube businesses. YouTube calls them “unsubstantiated claims.”

Leave a Comment

Your email address will not be published.