Alphabet, who owns Google, released its third-quarter report. While the report shows a 5% increase in revenue year-over-year, it is the slowest growth that the company has experienced since 2013. The company also says that its operating margin is down to 25%, and its income fell by 30% over the last year. All this gloomy news sent the company’s stock sharply lower.
Alphabet Pays out $1.06 on Stock
Almost every part of the megacorporation turned in weaker performances than experts had predicted. Experts had expected the company to pay out about $1.25 per share when they actually paid out $1.06. The company took in $69.09 in revenue while it was expected to take in $70.58.
Ad Spending Down
Ad spending on YouTube is responsible for much of the collapse. Retailers and others spent only $7.07 billion, which was $35 million less than experts had expected. Alphabet officials blame the worsening global economy, and the company says that the next few quarters may not be much better unless the world economy becomes more robust.
Alphabet Hires 36,000 New Employees
It may be time for Alphabet to go on a diet until the world’s economy surges again. The company’s costs rose 18% during the last year, and they spent 34% more on research and development and 26% more on marketing and sales. The company also hired 36,000 new employees to bring its total workforce to 192,000 people worldwide. Alphabet officials say that they have been able to hire several key people and consider talent their most precious resource.
Alphabet’s Price-per-earnings Ratio
The price-per-earnings ratio is lower since the company has over $100 billion in net cash. The company’s other division, including Waymo, lost $1.5 billion last year. Some analysts say this is especially disturbing since the company has no new products to show for its efforts.
Officials with Alphabet refused to answer a question about what key performance indicators they were internally tracking, but the third-quarter news was not favorable for investors in the company.
Dil Bole Oberoi
