Alphabet Inc (NASDAQ:GOOG) saw its third quarter 2022 revenues slide, due to a drop in advertising on YouTube videos.
The parent of Google reported revenue of US$69.09 billion for the quarter ended September 30, lower than analyst expectations of $70.59 billion. Earnings per share were US$1.06, compared to Wall Street expectations of $1.25.
CFO Ruth Porat said: “Our third quarter revenues were $69.1 billion, up 6% versus last year or up 11% on a constant currency basis. Financial results for the third quarter reflect healthy fundamental growth in Search and momentum in Cloud, while affected by foreign exchange. We’re working to realign resources to fuel our highest growth priorities.”
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YouTube advertising revenue was $7.07 billion, down from $7.21 billion in the first quarter of 2022, a decline of 1.9%.
On the other hand, Google Search revenue was up over 1Q, at a total of $39.54 billion, and Google Cloud revenue was also up, at $6.87 billion.
The search and social media company is facing strong competition from the likes of TikTok, plus the headwinds of rising costs and inflation putting the brakes on advertising dollars.
Sundar Pichai, CEO of Alphabet and Google, said: “We’re sharpening our focus on a clear set of product and business priorities. Product announcements we’ve made in just the past month alone have shown that very clearly, including significant improvements to both Search and Cloud, powered by AI, and new ways to monetize YouTube Shorts. We are focused on both investing responsibly for the long term and being responsive to the economic environment.”
Alphabet shares have fallen 29% this year. In after-hours trading, Alphabet shares were down by 5.6%, trading at US$98.65, lower from $104.48 at the close.
Contact the author at susie@proactiveinvestors.com