Friday, October 26, 2018
Google Revenue Misses Expectations
Google parent Alphabet Inc on Thursday missed analysts’ quarterly revenue estimates for the first time in at least two years and reported continuing erosion of its operating margin, sending shares down almost 7 percent after hours.
According to Reuters, the tech company’s third-quarter results fanned investor concern that big investments in new businesses, increasing regulatory scrutiny and emerging competition are producing slow and unpredictable returns.
Overall revenue rose 21 percent to $33.74 billion, missing analysts’ estimate by about $310 million, according to Refinitiv data.
Google ad sales contributed 86 percent of revenue, but growth slowed to 20 percent from nearly 24 percent last quarter.
“Google’s earnings momentum remains strong,” said Haris Anwar, senior analyst at Investing.com. “But if you dig in a little deeper, there are cost pressures which are building up and are mainly responsible for this period’s disappointment.”
Non-advertising revenue, such as from sales of mobile apps and cloud computing services, also came in slightly below expectations.
Also Thursday, Google announced that it has fired 48 employees for sexual harassment during the past two years and sent them away without severance packages, hours after a news report that it had protected some male executives facing sexual misconduct allegations and offered them large sums to leave the company.
The surprise disclosure Thursday came in an email to Google employees from CEO Sundar Pichai. It was a direct response to a New York Times report that the company had dismissed the executive in charge of its Android software for sexual misconduct in 2014 and paid him handsomely to leave.
A spokesman for Andy Rubin, the former Android executive, said he left on his own accord and has never been informed of any accusations of sexual misconduct. Rubin acknowledges having consensual sexual relationships with Google employees that didn’t report to him, adhering to the boundaries drawn by Google policy at that time, according to the spokesman, Sam Singer.
Posted 3:42:00 AM