Google owner’s shares jump 7% as it returns to growth
Alphabet, Google’s parent company, saw its shares jump seven per cent this morning after rebounding from a poor first quarter and returning to stellar growth.
In the three months to June 30 Alphabet reported year-on-year revenue growth of 22 per cent to $38.9 billion (£31.3 billion) on a constant currency basis, returning to growth after a slowdown in the prior quarter and coming ahead of analysts’ expectations of $38.2 billion (£30.7 billion).
It also dramatically improved its profit margins boasting earnings per share of $14.21, up from $4.54 a year prior and coming comfortably above predictions of $11.33.
Once again its key earner was advertising revenue from Google, the portion of its business which also owns YouTube, Google Maps, Chrome and Gmail, rising from $28.1 billion (£22.61 billion) in 2018 to $32.6 billion (£26.23 billion).
This allayed investors’ concerns that the tech giant’s advertising revenues were plateauing after it reported a slowdown in previous quarter, and failed to provide a reassuring explanation other than some periods were better than others.
Its results come as Google is aiming ramp up its retail offering having launched its dedicated “Shopping” page in the US this week.
Having first announced it was working on the service in May, Google has since been testing its new shopping service, which will allow users to purchase items directly from the platform rather than being redirected to a third-party retailer, in France.
Users who are signed into their Google accounts will be welcomed to the platform by name and will be presented with tailored suggestions using their entire search history for reference, alongside exclusive offers from retailers Google has partnered with.
“With revenues of $38.9 billion, up 19% versus the second quarter of 2018 and up 22% on a constant currency basis, we’re delivering strong growth,” Google’s chief financial officer Ruth Porat said.
“Our ongoing investments in compute capabilities and engineering talent reflect the compelling opportunities we see across the company.”