Google’s profits soar as revenue rises 62 percent.
Alphabet, the parent company of Google, just achieved in three months what it took until recently a whole year to win. It’s a level of growth companies of its size rarely, if ever, achieve, but the pandemic has erased all limits on tech companies.
The research and advertising firm on Tuesday reported record second-quarter earnings and earnings, justifying the enthusiasm of investors who have doubled its stock market value since the start of last year. The excellent results pushed equities up slightly in the secondary market.
Alphabet said it made a profit of $ 18.5 billion, or $ 27.26 per share, for the quarter. As recently as 2015, he’s been doing less than that all year. Analysts didn’t see it coming, estimating on average that the company would only earn $ 19.14 per share of profit. Even the most optimistic analyst only forecast $ 24.43.
Sundar Pichai, chief executive of Google, attributed the results to “a rising tide of online activity.” Revenue increased 62% to $ 61.88 billion from a year ago, an unprecedented level of increase since the company’s rapid growth around 2005, when it was still a start-up.
With a market capitalization close to $ 2 trillion, Alphabet is about as far away from a start-up as it gets. Like Amazon and Facebook, he is frequently criticized for exercising his power unfairly, a charge companies deny. Bills introduced in the US House would restrict big tech companies, and President Biden has appointed Big Tech critics to key regulatory positions.
Corporate profits from the pandemic are likely to only increase calls to action.
“Regulators are currently probably the biggest potential hurdle for Alphabet,” said Dave Heger, communications analyst for brokerage Edward Jones. “But antitrust lawsuits will take years. In the meantime, the business will continue to grow and add value to advertisers. History is probably in its favor.
Alphabet, like other big tech companies that offer tools for communicating, shopping, entertaining and working remotely, was initially considered vulnerable to the pandemic. In the second quarter of 2020, the first full quarter in which the virus was rampant, Alphabet’s revenue was down a bit as advertisers recalibrated. But it didn’t go down much and it didn’t last.
When advertisers realized the world was not going to end, they came back strong. This helped not only Google’s main search engine, but also the YouTube video division. YouTube’s advertising revenue grew 84% in the second quarter compared to the same period in 2020. In a conference call Tuesday, Google executives explained how the pandemic has pushed YouTube to become more of an e-commerce site .
Even the cloud storage business, where Alphabet is a perennial business also operated by Amazon and Microsoft, performed well: revenues jumped 50% and losses slowed.
Growth took a few more workers. Alphabet has hired more than 16,000 people in the past year, bringing its total number of jobs to 144,000.
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