Search engine giant Google crushed Street forecasts for its fourth quarter earnings, and unveiled a 20-for-1 stock split, sending shares sharply higher in extended hours trading.
Google parent Alphabet (GOOGL) – Get Alphabet Inc. Class A Report posted much stronger-than-expected fourth quarter earnings Tuesday, and approved a 20-for-1 split of its stock, as ad and search revenues surged amid a post-pandemic boost in marketing spend from companies around the world.
Alphabet said earnings for the three months ended in December came in at $30.69 per share, up 37.6% from the same period last year and well ahead of the Street consensus forecast of $27.48 per share.
Ad revenues across its search engine, web partnerships and YouTube surged 32.6% over the fourth quarter to $61.24 billion, while overall Alphabet sales topped $75.3 billion – a 32.3% increase — despite new limits on tracking and privacy, known as Identifier for Advertisers (IDFA), imposed by Apple (AAPL) – Get Apple Inc. Report last year.
Cloud revenues also impressed, rising 44.7% to just over $5.54 billion, although the division posted another operating loss of $890 million owing to the costs of site expansions around the world.
“Our deep investment in AI technologies continues to drive extraordinary and helpful experiences for people and businesses, across our most important products,” said CEO Sundar Pichai. “Q4 saw ongoing strong growth in our advertising business, which helped millions of businesses thrive and find new customers, a quarterly sales record for our Pixel phones despite supply constraints, and our Cloud business continuing to grow strongly.”
Google shares were marked 7% higher in extended hours trading immediately following the earnings release to indicate a Wednesday opening bell price of $2,946.20 each.
Google also said it has approved a 20-for-1 stock split, following similar moves by Apple and Tesla (TSLA) – Get Tesla Inc Report over the past two years. Each Google shareholder will receive a special ‘one-time’ dividend of 19 shares for each of its Google holdings following the split, which is planned for July 15.
The stock hit an all-time closing high of $2996.77 each on November 18, ten days after it crossed the $2 trillion market cap threshold in a move that pegged Google’s advance under CEO Pichai, who took over in October of 2015, at $1.6 trillion.
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