Scommerce Social network Google earnings top estimates amid strong online ad sales

The search-engine giant reported net income of $18.94 billion in its fiscal third quarter, compared with net income of $11.25 billion in the same quarter last year

Google parent Alphabet Inc. reported quarterly results that exceeded Wall Street estimates Tuesday, belying fears that it would be dinged by the changes in Apple Inc.’s mobile privacy policy that affected social-media companies.

The search-engine giant reported net income of $18.94 billion, or $27.99 a share, in its fiscal third quarter, compared with net income of $11.25 billion, or $16.40 a share, in the same quarter last year.

Revenue after removing traffic-acquisition costs ($11.5 billion) rose to $53.62 billion from $37.97 billion in the year-ago period. Overall revenue was $65.1 billion, up 41%.

Analysts surveyed by FactSet had estimated net income of $23.73 a share, on ex-TAC revenue of $52.3 billion.

Significantly, Alphabet’s operating margin improved to 32% in the quarter, vs. 24% in the same quarter a year ago.

Five years ago, I laid out our vision to become an [artificial intelligence]-first company. This quarter’s results show how our investments there are enabling us to build more helpful products for people and our partners. Ongoing improvements to Search, and the new Pixel 6, are great examples, Alphabet Chief Executive Sundar Pichai said in a statement announcing the results.

Google’s total advertising increased 43% to $53.1 billion. Search comprised $37.9 billion, up from $26.3 billion a year ago. YouTube ad sales continued to outperform, climbing to $7.2 billion from $5 billion a year ago.

Google’s Cloud revenue jumped 47% to nearly $5 billion, though the division is believed to trail rivals Amazon.com Inc. and Microsoft Corp. in cloud revenue.

Still, the results got a dull reaction in after-hours trading. Google’s stock was down 1% late Tuesday, though shares are up 59% so far this year.