Google stock fell on Tuesday as parent Alphabet (GOOGL) reported September-quarter earnings and revenue that topped analyst estimates. While internet search advertising revenue came in above expectations, YouTube and cloud computing sales were light in the Google earnings report.
Alphabet reported third-quarter earnings after the market close. Google earnings under generally accepted accounting principles, also known as GAAP, jumped 71% to $27.99 per share, including gains on equity investments.
Gross revenue rose 41% to $65.12 billion in the quarter ended Sept. 30.
Analysts had estimated Google earnings of $23.73 per share on gross revenue of $63.5 billion.
Google Stock: YouTube, Cloud Revenue Miss Estimates
The company said net revenue, minus traffic acquisition costs, came in at $53.63 billion vs. estimates of $52.07 billion. Traffic acquisition costs jumped 40% to $11.49 billion.
Google stock gained 1.4% to close at 2,786.17 on the stock market today. After the close, shares dropped 1.7% to 2,740.
Internet search and other revenue rose 44% to $37.93 billion vs. estimates of $36.41 billion. Google said cloud-computing revenue rose 45% to $4.99 billion vs. estimates of $5.17 billion. Despite the revenue miss, Google cloud cut its operating loss almost in half to $644 million.
YouTube advertising revenue rose 43% to $7.2 billion. Analysts had estimated YouTube ad revenue of $7.42 billion.
Institutional Ownership Weakens
Parent Alphabet repurchased $12.6 billion of GOOGL stock in the quarter.
Heading into the Google earnings report, Google stock traded below an entry point of 2,925.17. Institutional ownership has weakened and GOOGL stock has dropped below its 50-day-moving average.
Google stock has gained 57% in 2021. GOOGL stock still belongs to the IBD Leaderboard.
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