PremiumAlphabet Inc., the parent company of Google, under-performed market expectations for quarterly revenue as a result of advertisers' reduced spending amidst slowing economy
Google parent Alphabet Inc missed Wall Street estimates for quarterly revenue on Tuesday as advertisers cut back on their spending in the face of an economic slowdown.
The negative results reinforced worries on Wall Street that inflation will continue to hurt advertising spending. Last week, smaller rival Snap Inc's slowest-ever revenue growth rate sent inflation fears through tech sector and temporarily wiped out $40 billion in market capitalization.
Shares in Alphabet fell 5.8% in trading after the bell.
Alphabet's weak results raises concerns for other companies in the sector, especially advertising-dependent Meta Platforms. The Facebook parent, which reports results on Wednesday, saw shares drop 3.3% on Tuesday.
Google's advertising revenue was $54.48 billion in the third quarter, compared with $53.13 billion last year but came in below analysts' expectations.
"We're working to realign resources to fuel our highest growth priorities," said Ruth Porat, Alphabet's chief financial officer, in a press release.
The company said total revenue was $69.09 billion in the quarter ended Sept. 30, compared with $65.12 billion a year earlier.
Analysts on average expected revenue to be $70.58 billion, according to Refinitiv data.
"Google’s earnings miss this quarter proves it’s not immune to the challenges facing the digital advertising industry at large," said Jesse Cohen, senior analyst at Investing.com.
Alphabet's net income fell to $13.91 billion, or $1.06 per share, from $18.94 billion, or $1.40 per share, a year earlier.
This story has been published from a wire agency feed without modifications to the text.