By Karim Hammam
Alphabet Inc., the parent company of Google, reported third-quarter revenue that fell short of Wall Street expectations despite 25% year-over-year growth, sending shares down about 9% in after-hours trading on Wednesday.
Revenue and profit details
The Mountain View, California-based company posted revenue of $127.58 billion for the July-September period, up from $102.06 billion a year earlier but below the $127.97 billion average analyst estimate compiled by FactSet. Net income declined to $26.17 billion from $34.98 billion in the same quarter last year, and earnings per share came in at $2.12.
Impact of equity investment loss
Results were weighed down by an $8.7 billion loss on equity investments during the quarter. It was not immediately clear whether the reported earnings per share are directly comparable to analyst estimates, which had been around $3.01 per share.
CEO highlights AI progress
Sundar Pichai, chief executive of Google and Alphabet, described the quarter as strong and noted the company is now on a half-trillion-dollar annual revenue run rate. He said the Gemini artificial intelligence assistant has reached one billion users, making it the fastest-growing product in Google’s history.
Stock reaction
Alphabet shares fell to approximately $295.20 within an hour of the market close, reflecting investor disappointment over the revenue miss.
