Google's ad strength, stock-split plans boost Alphabet shares
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Google parent company Alphabet (NASDAQ:GOOG) saw its shares climb as much as 7% in after-hours trading, Tuesday, as the Internet giant reported better-than-expected earnings results and said it would enact a 20-for-1 stock split.
Following the close of trading, Alphabet (GOOG) said that for the quarter ending Dec. 31, it earned $30.69 a share, on revenue of $75.33 billion in revenue, compared to a profit of $22.30 a share, on sales of $56.9 billion in the year ago period. Alphabet (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.
Excluding costs associated with the acquisition of traffic, Alphabet reported revenue of $61.9 billion, while analysts had forecast $59.3 billion in sales.
Alphabet, whose shares closed Tuesday at $2,757.57, 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.
Alphabet (GOOG) said the majority of its 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.
On Monday, analyst Brian White, of Monness Crespi Hardt, said that despite advertising challenges, Alphabet (GOOG) is showing it is still able to gain ground in the digital ad market.