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Google and Amazon post third quarter results

October 28, 2016

Internet giants Google and Amazon have both posted results for the third quarter. Google parent Alphabet posted stronger than expected revenues. Expenses for Amazon rose and its forecast disappointed analysts.

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Google parent Alphabet Inc reported stronger-than-expected quarterly revenues and earnings on Thursday, helped by strong advertising sales on mobile devices and YouTube. The company posted third-quarter adjusted earnings per share of $9.06 on revenue of $22.45 billion (20.61 billion euros.)

The results were driven by strong advertising sales on mobile devices and YouTube. Users spent more time on their smartphones and advertisers spent more money in trying to reach them. 

The company authorized a $7 billion stock buy-back.

Despite the strong results, Google's stock rose just 1 percent in after-hours trading. 

Google has successfully faced down concerns about how it would push its vast web advertising business toward mobile. Wall Street appears to have been reassured, according to analyst Kerry Rice of Needham & Co. "They are just one of the best positioned companies for the future of the internet," Rice said.

Amazon 

Online giant Amazon said Thursday its profits more than tripled in the third quarter but its shares fell as the rise was weaker than expected.

Amazon shares were down 6.8 percent in after-hours trading, as its third quarter report showed expenses rose and the company provided a disappointing fourth-quarter revenue forecast. The world’s biggest online retailer said its net sales rose to $32.71 billion in the third quarter ended September 30 from $25.36 billion a year earlier.

The online giant said its net income rose to $252 million, or 52 cents per share, from $79 million, or 17 cents per share, a year earlier. It was company’s sixth straight profitable quarter. The consensus estimate for earnings per share had been 78 cents. 

Total operating expenses rose 31.5 percent to $10.94 billion as the company invested in Amazon Web Services, expanded its Prime program internationally, built up its warehouse and delivery infrastructure and increased its original video offerings.

"We are in a period of advancing up our investments in the second half of 2016, even more so than in prior years," Amazon CFO Brian Olsavsky said in a press call Thursday. 

Amazon forecast net sales of between $42.0 billion and $45.5 billion for the current-quarter, which includes the holiday shopping season.

bik/jm (Reuters, AFP)