Alphabet earnings surge on mobile, YouTube

Alphabet Inc. (GOOGL - Free Report) just released its fourth-quarter fiscal 2016 earnings results, posting earnings of $7.56 per share and revenue of $26.064 billion.

Analysts had projected $9.64 EPS and $25.26 billion in sales. Google revenue for the quarter was almost $26 billion-up 22% over the same quarter last year-and it brought in $7.8 billion in profit, up roughly 17%.

At $26.1 billion, Alphabet's gross revenue was up 22 percent over the fourth quarter of 2015, and beat expectations. Revenues jumped 22% from past year to $26.06 billion, topping analysts' $25.14 billion view, however. The paid clicks, or clicks on Google ads, grew 36 percent, compared with a 33 percent increase in the third quarter.

Cost-per-click dropped 9%, a slide that has continued as Google sells more mobile ads, which command lower prices.

"2016 was simply a great year for us", said Ruth Porat, chief financial officer of Alphabet and Google, in a conference call with analysts.

"The internal transparency we've provided to our business leaders across the Other Bets and Google is helping us to allocate resources more thoughtfully across the opportunities that we see", Porat said during a conference call.

Alphabet will "continue to calibrate the magnitude and pace" of its investments in other bets, and "exercise careful stewardship over the amounts and pace of investments", Porat said.

MOUNTAIN VIEW, CA-based Company's advertising revenue, which accounts for the greater part of its trade, surged 17.4% to $22.40bn in the last three months period of 2016. That slight miss sent Alphabet's stock down in after-hours trading. In the quarter, revenue from these "other bets" soared 75% to $262 million and trimmed their operating loss by $20 million to $1.09 billion. The Google umbrella covers the company's enterprise cloud, software and data management products. Analysts are now concerned for Google's future, as they found a potential problem for the search giant: voice.

As mobile targeting technology advances, a larger percentage of advertising budgets will be allocated to mobile ad formats and Google are well positioned to do well.

Google CEO Sundar Pichai said the company is prioritizing YouTube, integrating more machine learning to improve content and advertising. The Company holds interests in Google Inc. The Company's segments include Google and Other Bets.

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