Alphabet, Google’s parent company, reported a big miss in its fourth-quarter 2017 earnings report Thursday. The stock was down as much as 6% in after-hours trading.
Here are the results versus Wall Street’s expectations, per Bloomberg:
- Net Revenue: $US26.23 billion, up 24% year-on-year
- EPS (GAAP): $US10.04
Here are some other important key pieces from the earnings report:
Traffic acquisition costs (TAC) was $6.45 billion, up quite a bit from the $4.85 billion in TAC a year ago. TAC is what Google pays to third parties like Firefox and Apple so web searches on those platforms direct to Google. The growing TAC is one of the biggest concerns with Google’s advertising business. TAC as a percentage of revenues was the highest it’s been in at least two years.
Alphabet said the new Tax Act caused a one-time $9.9 billion expense in the fourth quarter.
Other Bets revenues were $409 million, up from $209 million a year ago. Other Bets are the other companies under the Alphabet parent like Waymo (self-driving cars), Nest (smart appliances), Verily (life sciences), and more. Other Bets operating losses were $916 million. They were $1.09 billion a year ago.
Google’s Other revenues, which includes hardware products and cloud services, were $409 million, up from $262 million a year ago. Google released several new hardware products last fall like the Pixel 2 smartphone and Google Home Mini speaker that contributed to Other revenues. The company sees hardware as a promising area of growth.
Alphabet’s earnings report also annnounced the company plans to buy back up to $8.6 billion worth of Classs C stock.
Alphabet announced in its earnings report that it appointed John Hennessy as chairman of the board. The company’s former executive chairman Eric Schmidt stepped down a few weeks ago.
We’ll have more for you soon. Refresh this post for the latest.