Alphabet reported mixed fourth-quarter results Monday, sending shares down 3 percent in extended trading.
Here’s how the company did compared with Wall Street estimates:
- Earnings: $12.77 per share
- Revenue: $39.28 billion vs. $38.93 billion according to Refinitiv consensus estimates
- Traffic acquisition costs: $7.44 billion vs. $7.62 billion according to StreetAccount
Alphabet-owned Google is facing new pressure in digital advertising from Amazon’s rising presence in the market, at the same time its costs of doing business are rising.
Traffic acquisition costs — the fees Google pays to companies like Apple to be the default search engine — are projected to jump 16 percent quarter over quarter and 18 percent year over year.
TAC as a percent of advertising revenue is forecast at 23 percent, in line with previous quarters.
Meanwhile, analysts are expecting Google to continue growing its “other revenues” segment, which includes its cloud business and hardware sales. Wall Street is expecting the division to post $6.43 billion during the fourth quarter, according to StreetAccount, marking a 37 percent jump from the fourth quarter of 2017.
Alphabet’s “Other Bets” category, which houses Alphabet’s other companies, like health venture Verily and self-driving start-up Waymo, is expected to post revenue of $187.4 million, according to StreetAccount, up from $146 million during the third quarter.
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