Alphabet surges 11% after Q4 earnings beat expectations, stock split on tap
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Alphabet (GOOGL, GOOG) shares surged in pre-market trading on Wednesday, as the tech giant posted fourth-quarter results that blew past Wall Street expectations and it announced a 20-for-1 stock split.
For the period ending December 31, Alphabet earned $30.69 a share, on revenue of $75.33 billion. Alphabet (NASDAQ:GOOG) smashed the estimates of Wall Street analysts, who had forecast the company to earn $27.24 a share, on $71.83 billion in revenue.
Citi analyst Jason Bazinet said he expected the shares to react "positively," given the level of results.
Alphabet shares were up nearly 11% to $3,050 in early trading on Wednesday.
The majority of the company's revenue came from Google advertising, which included sales from search, YouTube ads and Google network ads. Such advertising revenue totaled $61.2 billion, up from $46.2 billion in the fourth quarter of 2020.
Excluding costs associated with the acquisition of traffic, Alphabet reported revenue of $61.9 billion, while analysts had forecast $59.3 billion in sales.
In addition, Alphabet said it would implement a 20-for-1 stock split "in the form of a one-time special stock dividend" on each of the company's Class A, Class B and Class C stock. If the split is approved by Alphabet stockholders, all shareholders as of July 1 will receive new company shares on July 15.
UBS analyst Lloyd Walmsley, who boosted his price target to $3,900 per share following the results, said the stock split "may bring more retail investors into the stock and could help set the stage for inclusion into the [Dow Jones Industrial Average]."
Last month, Google (GOOG, GOOGL) said it was pushing to dismiss an antitrust lawsuit brought upon by several states, including Texas, that charged the search-engine giant with abusing dominance in online advertising.