Wall Street climbs ahead of Amazon, Alphabet earnings; stimulus in focus

Daniel Fowler
February 3, 2021

The company said fourth-quarter net income rose to $15.23 billion or $22.30 per share from $10.67 billion or $15.35 per share in the corresponding period of past year. One of the driving factors for Google's growth was due largely to Search and YouTube revenue, particularly from brand ads.

Ads are Alphabet's biggest revenue stream, sure, but investors are paying just as close attention to its fast-growing cloud business.

YouTube ads brought in $6.89 billion in Q4, a 46 per cent jump from the same quarter a year ago.

Advertising revenue in Q4 came out to $46.2 billion, up 22 per cent from $37.93 billion in the same quarter past year.

Alphabet Inc. said its Google Cloud business had an operating loss of $1.2 billion in the fourth quarter, a new disclosure that may disappoint some Wall Street analysts.

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Traffic acquisition costs (TAC): $10.47 billion, vs. $9.32 billion as expected by analysts, according to StreetAccount.

Total revenues climbed 23% to $56.9 billion in the three months ended December 2020. "Google other revenues" - which includes hardware, Play Store, and non-advertising YouTube revenues - reported $6.67 billion, compared to $5.26 billion the same quarter previous year. That resulted in a 42.7% gain in earnings. However, sales and marketing expenses declined almost 8% for the fourth quarter from $5.73 billion to $5.31 billion for Q4 and declined 3% for the whole year. Earnings per Share (EPS) rose to $22.30 per share from $15.35 per share. By the top of the quarter, that determine was as much as $26.5 billion.

So using our fingers and toes, we can compute that Google's parent added $6.4 billion in cash during the fourth quarter of the year. For the first time ever, Alphabet released information related to its cloud unit; for the quarter that business took in $3.8 billion in revenue while reporting a loss of $1.2 billion.

Wall Street was smitten with Alphabet's report. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes.

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