Alphabet Inc (NASDAQ:GOOGL) and other members of the FANG tech titans may be increasingly under fire from governments but it is still making money hand over fist.
The Google owner's “A” shares were trading 0.6% higher at US$1,079.99 in pre-market trading after first quarter earnings and sales beat analysts' estimates.
The personal data harvesting behemoth announced earnings per share of US$9.93 that were comfortably above the consensus forecast of US$9.28.
Revenue of US$31.15bn was almost a billion smackers above the US$30.29bn expected by analysts.
Jordan Hiscott, the chief trader at ayondo markets, said Alphabet has been unscathed by privacy data issues affecting wider tech community.
“Data privacy issues are front and centre for many technology companies at present, but on the upside, the outperformance has certainly been contained in recent weeks as investors weigh how serious this could be for future share price trajectories. Indeed, even technology behemoths like Facebook have been linked to data privacy issues, while the wider tech community is bracing itself for further revelations of the use of individual user data.
“However, Alphabet, the parent company of Google, completely circumnavigates privacy data issues and is almost unscathed to produce a fantastic set of Q1 earnings. It’s what I would call in colloquial terms a ‘back to basics’ approach for how the company generates revenue, with profits up 73% thanks to advertising income. Over the same period, 82% of revenue came from ads, while the rest came from all other divisions, such as its Nest Labs unit, the home automation division that controls heating, security cameras and door access points.
“We’re now approaching a crucial time for Alphabet. The EU’s new [data protection] legislation, GDPR, soon comes into force, and importantly this gives users more control over their data. While it’s a positive step for the consumers, it could hugely change how Alphabet targets users with ads from browser data and other online tracking activities,” Hiscott said.
Elsewhere in the tech sector, the share price reaction to the results of Cadence Design Systems Inc (NASDAQ:CDNS) put Alphabet in the shade.
The software and engineering services company's stock was up 14.3% at US$42 in screen-based trading after it revealed yesterday evening net income of US$113Mln on revenue of US$517mln; analysts had penciled in US$505mln for revenue.
Earnings per share of 40 cents were three cents higher than the market had been expecting.
Brokerage firm TD Ameritrade Holding Corp (NASDAQ:AMTD) was down 1.7% at US$60.15 despite a solid set of results for the second quarter of its fiscal year.
Underlying earnings per share of 73 cents per share were a penny ahead of the consensus forecast. Revenue of US$1.42bn was ahead of the consensus forecast of US$1.36bn while the broker revealed it processed around 943,000 trades a day during the first three months of the year.
Earnings updates expected today
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