(Boursier.com) — Alphabet drops 7.5% to $96.6 on Wall Street, following its quarterly financial publication. The stock is now losing more than a third of its value this year. It must be said that Google’s parent company missed the consensus for profits and revenues in its third quarter, with weak advertising revenues. YouTube suffers for the occasion its first decline in advertising revenue … The group led by Sundar Pichai also indicates that it will reduce hiring. The only real consolation comes from the ‘cloud’ activities, which are exceeding expectations. Finally, note that Google agreed to compliance reforms as part of an agreement with the US Department of Justice.
Alphabet unveiled total third-quarter revenue of $69.1 billion, up from $65.1 billion a year earlier and $70.6 billion consensus. YouTube advertising revenue declined to 7.07 billion from 7.2 billion a year earlier. The group’s net profit was 13.91 billion dollars and $1.06 per share in the quarter ended at the end of September, against 18.94 billion dollars a year earlier. The consensus was $1.25 profit per share over the period. The operating margin fell to 25%, against 32% a year earlier. Google Cloud resists, however, with revenues of 6.9 billion dollars, compared to 5 billion last year.
The American technological giant is therefore suffering from the economic and competitive context. It hired 12,700 people during the quarter, but hiring in the final quarter of the fiscal year will be at least half that.
Ruth Porat, the Californian group’s financial director, attributes the slowdown in advertising revenue growth to the very strong performance of the previous period. Regarding YouTube, she points out that some advertisers are currently restricting their advertising expenditure. In total, Google’s advertising revenues represented $54.5 billion for the quarter, compared to $53.1 billion a year earlier. These earnings also miss the market consensus.
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