Google propels record Alphabet revenue, driving shares up 8%
Alphabet, the parent company of Google, reveals record quarterly sales, much above the expectations. Its advertising business thrived during the period as the use of Google Search increased while consumers looked for online shopping. Advertisers have increased their marketing budgets.
The company simultaneously announced to implement a stock split by 20-to-1 and this led to a jump in the stock price by 8 percent.
The Alphabet result is an indication that the world is moving towards a digital economy. This has led the Big Tech companies to become resistant to any small-market shocks.
Meanwhile, concerns about inflation, supply chain shortages and COVID-19 variants have hurt the sales of several businesses and rattled Wall Street. The companies which control e-commerce, streaming entertainment and hybrid work faced no dip during the 2020 and 2021 pandemic period.
The Q4 sales of Alphabet were up by 32 percent to $75.3 billion, which was above the estimates of many financial analysts. It is learned consumers used Google Search to look for hobbyist items and apparel. Simultaneously, the advertisers of travel, entertainment and retail finance increased their budgets.
Alphabet investors are to receive 19 additional shares against one unit on July 1 under the stock split plan. However, the approval of shareholders is still awaited before the split is implemented. However, the move would make the shares more affordable and attract more new investors.
Alphabet's sales increased by 41 percent in 2021 to $258 billion while the growth was just 13 percent in 2020 as advertisers reduced spending in the wake of the pandemic. The company generates 81 percent of its revenues from the advertising business and this includes YouTube.
Meanwhile, companies like TikTok and Amazon are taking away small pieces of Google's market share with respect to global advertising.
The profit of Alphabet was up by 89 percent to $76 billion in 2022.