Source – SaltWire
Alphabet Inc. (GOOGL) made headlines on Thursday with the release of its first-quarter earnings, surpassing market expectations and unveiling its inaugural dividend. The announcement sent Google’s stock skyrocketing, marking a significant milestone for the tech giant.
Strong Financial Performance and Historic Dividend Announcement
Alphabet reported robust earnings and revenue figures for the first quarter, exceeding consensus estimates. The company’s earnings per share stood at $1.89, marking a remarkable 61% increase from the previous year. Additionally, gross revenue saw a notable 15% rise, totaling $80.54 billion. Analysts had anticipated earnings of $1.51 per share on revenue of $78.7 billion.
In a historic move, Alphabet declared its first-ever quarterly dividend, set at 20 cents per share. This development places Google in the ranks of dividend-paying tech giants, alongside Meta Platforms (META), the parent company of Facebook. However, Alphabet did not provide any updates regarding its search for a new chief financial officer.
Impressive Performance across Divisions
Alphabet’s success was not limited to its core advertising business; its cloud computing and YouTube units also outperformed expectations. Advertising revenue saw a 13% increase, surpassing estimates at $61.66 billion. Meanwhile, YouTube ad revenue surged by 21% to $8.1 billion, exceeding projections of $7.7 billion. The company’s cloud-computing revenue rose by 28% to $9.574 billion, surpassing estimates of $9.4 billion. Alphabet’s stock, with a Composite Rating of 97 out of 99 according to IBD Stock Checkup, witnessed a remarkable surge of over 13% in extended trading, reaching $176.65.
Market Response and Future Outlook
Market analysts reacted positively to the Company’s earnings report and dividend declaration. RBC Capital analyst Brad Erikson noted that margins significantly surpassed expectations, leading to a 25% beat in earnings per share. Alphabet also announced a substantial $70 billion stock buyback program, further bolstering investor confidence. Despite concerns over capital spending and competition in generative AI, Alphabet’s stock had already advanced by 11% in 2024. The company’s strategic moves, including potential AI-related deals with Apple, position it as a key player in the evolving tech landscape.
Alphabet’s impressive financial performance, coupled with its historic dividend announcement and strategic initiatives, reaffirms its position as a leader in the technology sector, with Google stock poised for further growth.
