Google ad surge helps Alphabet earns record profit

Google owner Alphabet Inc reported higher than expected third-quarter ad sales.

Google advertising revenue rose 41% to $53.1 billion during the third quarter.

Alphabet’s overall sales jumped to $65.1 billion, above the average estimate of $63.3 billion among analysts tracked by Refinitiv.

Shares fell 0.93% to $2,760.19 following the after-hours release of the financial results.

Quarterly profit was $18.936 billion or $27.99 per share, beating expectations of $24.08 per share and marking a third-straight quarter of record profit.

Alphabet’s profit is subject to wide fluctuations because accounting rules require the company to measure unrealized gains from its investments in startups as income.

Google Cloud, which trails Amazon.com Inc and Microsoft Corp in cloud services market share, increased revenue by 45% to $4.99 billion, slightly below estimates of $5.2 billion.

Alphabet’s total costs increased 26% to $44.1 billion in the third quarter and the company’s workforce size passed 150,000 employees.

Alphabet shares have outperformed those of many big peers since the end of last year, rising about 57%. Microsoft is up 39%, Facebook 20% and Amazon 2% over the same period.

But shares of Alphabet trade at a slight discount to Facebook, the internet’s No. 2 seller of online ads. Facebook trades at 6.8 times expected revenue over the next 12 months compared with 6.4 times for Alphabet.

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