Alphabet’s first quarter revenue fell below analysts’ expectations on Tuesday, as the company struggles with slower-than-anticipated growth influenced by supply chain struggles, inflation, and the war in Ukraine.
In its quarterly earnings report, Google’s parent company said it had made quarterly profit of $16.436bn, or $24.62 per share, missing expectations of $25.76 per share. Alphabet shares fell 4.3% in after-hours trading.
The results suggest Google is struggling in the latest economic phase of the pandemic, which is bringing elevated interest rates, higher transport costs and shortages of products from couches to cars to infant formula.
First-quarter sales for the world’s largest provider of search and video ads were $68.01bn, 23% higher than last year but below the average estimate of $68.1bn among financial analysts tracked by Refinitiv, Google’s first miss since before the pandemic.
Google advertising sales were $54.66bn, just above estimates of $54.56bn. But Cloud sales grew at a slower pace than a quarter ago, and Google’s “other” revenue, which includes app, hardware and subscription sales, was $6.8bn, below estimates of $7.3bn.
Google is expected to grab 29%, or the leading share, of the $602bn global online ad market in 2022, at least the 12th straight year it has been on top, according to Insider Intelligence.
Product changes to resolve antitrust concerns and rising competition from companies such as Amazon and TikTok are chipping away at ad sales. Google also cut advertising offerings and other services in Russia following the invasion of Ukraine during the first quarter.
Though Alphabet shares were down over 17% this year entering Tuesday, they have risen nearly 90% over the past two years.
Reuters contributed
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