The-Mother Alphabet presented its second quarter results. Although sales and profits shrank significantly in some cases, both categories exceeded analysts’ expectations. The company also owes the good result to Google’s cloud division, which absorbed part of the shrinking advertising revenue.
Revenue shrank 2 percent to $ 38.3 billion. Operating profit fell 30 percent to $ 6.4 billion. Net income also declined 30 percent to $ 6.96 billion, or $ 10.13 per share. Wall Street had predicted a $ 8.34 surplus per share and sales of $ 37.76 billion.
In after-hours trading, Alphabet stock rose 0.5 percent to $ 1,546, further approaching the current 52-week high of $ 1,587.05. This suggests that investors viewed the current key figures as positive overall.
The main source of revenue, Google’s online advertising business, continued to suffer from the global corona crisis in the second quarter. $ 29.87 billion was an 8 percent decrease. The cloud division, however, reported a 43 percent increase in sales to $ 3 billion. The Other Revenue category, which includes YouTube subscriptions and Pixel smartphones, also improved 25.5 percent to $ 5.1 billion. As a result, Google’s stake only shrank 1.8 percent to $ 38 billion, despite the weak advertising business.
“In the second quarter, our total revenue was $ 38.3 billion, reflecting a gradual improvement in our advertising business and strong growth in Google Cloud and other income,” commented Google CFO Ruth Porat on the quarterly report. “We continue to navigate through a difficult global economic environment.”
Other bets earned $ 148 million, $ 14 million less than a year earlier. The shortfall they caused increased more than $ 100 million to $ 1.12 billion.