Earnings Calls and Falls – Google Misses Earnings
As a busy earnings week kicks off, one of the top five largest companies in the world has just created headlines after missing analysts’ projected reports for Q3. Excluding one period from the pandemic, Google has just had one of its weakest periods of growth since 2013. Revenue for the trillion-dollar company had only increased 6% for the third quarter, which is down from the 41% a year earlier. This report also makes Google’s fifth consecutive quarter of slowing sales growth, mostly due to falls in YouTube and Search Ad revenue. Although analysts had expected an increase of 3%, YouTube ad revenue slipped by around 2%. This prompted messages by Google executives and officers that have echoed throughout the corporate space.
Cuts in spending will soon take place within Google’s cost structure, with reports that lower investments and employees may occur. Google CEO Sundar Pichai stated that employment growth will be lower in Q4, to help balance out lower demand and revenues in their ad department. On the positive front, Google Cloud brought in almost $7 billion in revenue, one of the only major departments that outshined analysts’ expectations. Regardless, the overall negative earnings news sent after-market investors back, where shares of Google have fallen over 6%.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.