By Yasin Ebrahim
Investing.com - Alphabet A (NASDAQ:GOOGL) reported on Thursday third quarter earnings that beat analysts' forecasts, underpinned by a strong rebound in ad spending.
Alphabet A announced earnings per share of $16.4 on revenue of $46.17B. Analysts polled by Investing.com anticipated EPS of $11.28 on revenue of $42.76B.
The beat was led by strong ad revenue that boosted performance in its biggest business, Google Search & other, and supported its Youtube business.
“Total revenues ... reflect broad based growth led by an increase in advertiser spend in Search and YouTube as well as continued strength in Google Cloud and Play,” said Ruth Porat, chief financial officer of Alphabet and Google.
Google search & other increased revenue 6.5% to $26.34 billion for the quarter year-on-year, while YouTube ads jumped 32.4% ot $5.04 billion.
Cloud revenue surged 44.5% to $3.44 billion for the quarter year-on-year, and YouTube rose 31%.
"We had a strong quarter, consistent with the broader online environment," said Chief Executive Officer Sundar Pichai. "It's also a testament to the deep investments we've made in AI and other technologies, to deliver services that people turn to for help, in moments big and small."
"With Alphabet's heavy reliance on advertising spending from sectors like travel and hospitality, there is a lot of pressure on the company’s main growth engine this year. One bright area that could pick up some of the slack in the current weak digital ad market is the company’s cloud-computing business, which continues to grow even during the pandemic. If the company is able to show some recovery in its digital ad market, investors will take this as a sign that the worst is over in the current down cycle," Investing.com analyst Haris Anwar said.
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