Alphabet Inc, parent company of Google, has posted record profits for the third quarter, backed by higher than expected ad sales.
The search engine’s advertising revenue increased 41 percent to $53.1 billion during the corresponding quarter, while Alphabet’s overall sales jumped to $65.1 billion, above the estimated $63.3 billion.
The company, through its search engine, YouTube video service and partnerships across the Web, sells more internet ads than any other company. During the coronavirus pandemic, the demand for its services surged as people spent more time online in the past year.
Google’s chief business officer Philipp Schindler said that the consumer shift to digital will continue even after opening of stores.
However, the company’s shares dropped 0.93 percent to $2,760.19 following the after-hours release of the financial results. Quarterly profit was $18.936 billion or $27.99 per share, beating expectations of $24.08 per share and marking a third-straight quarter of record profit.
Alphabet’s chief financial officer Ruth Porat reported modest impact on YouTube ad sales from Apple’s efforts. But analysts said Google overall was less affected than peers because its search engine collects data on user interests that is valuable to advertisers and is unmatched in the industry.
Other companies also faced slowdowns because advertisers cut spending over supply-chain issues. Google Cloud, which trails Amazon.com Inc and Microsoft Corp in cloud services market share, increased revenue by 45 percent to $4.99 billion, slightly below estimates of $5.2bn.
Alphabet’s total costs increased 26 percent to $44.1 billion in the third quarter and the company’s workforce size passed 150,000 employees.
Alphabet shares have outperformed those of many big peers since the end of last year, rising about 57 percent. Microsoft is up 39 percent, Facebook 20 percent and Amazon 2 percent over the same period. But shares of Alphabet trade at a slight discount to Facebook, the internet’s No. 2 seller of online ads.