Google’s parent company, Alphabet, reported sharp drops in profits and nearly flat revenue growth in the last three months of last year. As the company faces increasing competition in the digital advertising market and a decline in advertiser spending due to economic uncertainty.
post letters $13.6 billion profit In the final three months of 2022, it fell by about a third compared to a year earlier and below what Wall Street analysts had expected.
Revenue from this quarter came only more than 76 billion US dollarsThat’s almost exactly what analysts expected. But growth slowed significantly from the same period last year when sales rose 32%.
Alphabet’s shares were down about 4 percent in after-hours trading on Thursday after the report.
The report comes after Google said last month. release 12,000 employees in an effort to divert attention to the company’s core business.
“We have significant work underway to improve all aspects of our cost structure. to support our investments in our top growth priorities. to deliver long-term and profitable growth,” CFO Ruth Porat said in a statement alongside the earnings report.
Google Core Sales The advertising business fell 3.5% year over year. during the key quarter of December This is another sign of a tougher digital advertising market. But revenue from the company’s cloud business This is an increasingly important source of revenue, growing 32% year over year to $7.3 billion.
Jesse Cohen, senior analyst at Investing.com said, “The search giant underperformed our expectations in almost every business unit. The most important is the main ad search section.”
In talks with analysts following the report, Alphabet executives highlighted the company’s plans to “reengineering costs” and prioritizing “Efficiency” and growth in key growth areas In addition to the layoffs in January The company also plans to reduce its real estate footprint in the first quarter and “Significantly slow down employment in 2023,” Porat said.
Google hasn’t provided specific guidance for the first three months of 2023, although Porat provided some insight into what the company can expect.
in advertising business She said the company is using artificial intelligence to improve its offerings. Including return on investment and ad targeting. As well as improving monetization of YouTube Shorts videos for Google Play, Porat said the company “Remains optimistic about the long-term prospects for mobile apps and games” but remains cautious about “Current Trends”
The outlook for hardware and Google Cloud looks pretty bright, Porat said, and the company continues to invest in those areas for future growth.