Alphabet’s sales jumped 32% to $75.3 billion in the fourth quarter, for a third straight quarterly sales record and topping the average estimate of $72 billion among financial analysts
Google parent Alphabet Inc reported record quarterly sales that topped expectations on Tuesday, as its internet advertising business surged on consumers using Google search as they shopped online and advertisers upping their marketing budgets.
Alphabet’s shares jumped more than 8% in after-hours trading, also rising on the company’s announcement that it would undertake a 20-to-one stock split.
The results were the latest to reinforce that the global trend toward a more digital economy has made Big Tech companies resistant to small-market shocks. While concerns about rising inflation, COVID-19 variants and supply-chain shortages have rattled Wall Street and hurt sales at some businesses, the companies that control key gateways to e-commerce and streaming entertainment have not seen a dip since the early days of the pandemic.
Alphabet’s sales jumped 32% to $75.3 billion in the fourth quarter, for a third straight quarterly sales record and topping the average estimate of $72 billion among financial analysts tracked by Refinitiv.
Consumers dove into Google search looking for apparel and hobbyist items, while retail, finance, entertainment and travel advertisers raised marketing budgets, Google’s chief business officer, Philipp Schindler, said on an earnings call.
Analysts said Google, which generates more revenue from internet ads than any other company, is proving that its growth is unstoppable for the foreseeable future.
The pandemic has handily accelerated the world’s reliance on digital advertising, said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown. Sitting through traditional TV advert breaks or reading billboards suddenly feels completely archaic in the age of streaming and mobile phone addiction.
Shares of Alphabet rose 8.6% in after-hours trading, to $2,990.10, erasing their losses for the year-to-date. Shares of competitors in online ads including Facebook owner Meta Platforms Inc, Twitter Inc, Trade Desk Inc and Snap Inc all rose as well.
Under the planned 20-for-one stock split, investors as of July 1 will receive 19 additional shares for each one held. The split, which is subject to shareholder approval, will make the stock more affordable and potentially eligible for inclusion in more market indexes.
For the 2021 full year, Alphabet’s sales rose 41% to a record $258 billion. Sales had grown just 13% in 2020, the slowest rate in over a decade, after advertisers slashed spending in the first few weeks of the pandemic.