Sat, Oct 24, 2015 - Page 15 News List

Alphabet shares soar as Google defies expectations

AFP, SAN FRANCISCO

Shares of newly formed parent company Alphabet Inc on Thursday surged after Google Inc earnings shined on riding hot trends in mobile search and streaming video.

Alphabet credited money from advertising in search results on mobile devices and from video advertising at YouTube with powering a 45 percent jump in profit to US$3.98 billion on revenue that was up 13 percent to US$18.67 billion in the recently ended quarter.

Alphabet shares shot up more than 10 percent to US$723 in after-market trades on the figures, which highlighted also how Google managed to keep a rein on expenses.

Alphabet chief financial officer Ruth Porat said that the quarterly earnings figures, which beat Wall Street expectations, showed the strength of Google’s business model, particularly when it came to Internet searches using smartphones or tablets.

“The key highlight this quarter was the strong growth of our mobile search revenue,” Porat said during an earnings call, noting that YouTube also helped power the revenue rise.

Six Google products, including its Android mobile operating system, boasted having more than 1 billion users.

Alphabet also announced that its board of directors has authorized the issuance of US$5.09 billion worth of shares starting in the current quarter.

Starting at the end of the current quarter, Alphabet — the new parent of the Google search unit and a variety of other separate technology divisions — is to report Google earnings separate from an “other bets” category that includes its other innovative enterprises, Porat said.

She said the corporate structure change lets the company continue to tackle some of the world’s “biggest problems” in ways that could open doors to new business opportunities at the same time.

“There is a real sense of energy and focus throughout the company,” Google CEO Sundar Pichai said during the earnings call. “Our vision is for Google to remain a place of incredible creativity and innovation.”

Worldwide, Internet search traffic on mobile phones has surpassed that done on desktop computers and Google has made a priority of tailoring products and services for that trend, Pichai said.

Separately, Amazon.com Inc shares on Thursday vaulted higher after the online giant’s second consecutive surprise profit, defying expectations for a loss.

Amazon posted net income of US$79 million in the third quarter, against analyst expectations of more losses. That came after the US$92 million the company scored in the second quarter.

The profits came on a 23 percent year-on-year gain in total sales to US$25.4 billion.

Amazon shares rallied 10.7 percent in after-hours trade to US$624.50.

The Seattle-based company has not disclosed details on sales of its Fire tablet computers, but founder Jeff Bezos said in the earnings statement that “Fire is the No. 1 best-selling product on Amazon.com since launch, and based on the strength of the customer response, we are building millions more than we’d already planned.”

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