Sears opens its first Home & Life stores and plans to open more as it looks for a fresh start after bankruptcy.Retailread more
Former Foreign Minister Boris Johnson is seen as the bookmaker's favorite to succeed outgoing Prime Minister Theresa May.Europe Politicsread more
Facebook's founder Mark Zuckerberg has held talks with the Winklevoss twins, his old rivals, about the social media giant's developing digital currency, the Financial Times...Bitcoinread more
An analyst for Ark Invest, which has a major investment in Tesla, says recent drastic price-target cuts by others on Wall Street are missing the big picture.Investingread more
The markets have been very slow to recognize the very high stakes game that is playing out on the world stage today.Economyread more
May had failed to win a parliamentary majority on Britain's withdrawal from the European Union.Europe Politicsread more
The Trump administration proposed Friday to roll back health-care protections for transgender people by ending an Obama-era policy that prohibited health providers from...Health and Scienceread more
Analyst Michael Olson says he has "a high degree of confidence" that Amazon shares can reach the level without "significant changes to the business."Investingread more
House Judiciary Committee Chairman Jerry Nadler says Mueller told the committee he would make his opening statement before the public.Politicsread more
The biggest U.S. gasoline price surge in years is running out of steam just in time for the start of the summer driving season.Energyread more
A downgrade from BMO analysts led to an unsavory drop in Chipotle's stock, and some analysts are advising waiting out the weakness.Trading Nationread more
Alphabet shares sank on Monday after Google's parent company reported revenue that fell below analyst estimates for its first-quarter 2019. The drop wiped more than $60 billion off Alphabet's market cap.
In premarket trading Tuesday, Alphabet's stock was down more than 7%.
Here's what Alphabet reported compared to Wall Street's expectations:
Google is seeing decelerating growth after consistently expanding at 20% or more in prior periods. Revenue increased 17%, down from growth of 28% a year earlier, and ad sales rose 15%, down from 24% a year ago.
Paid clicks on Google properties grew only 39% from the year-ago quarter. That's a sharp drop from the fourth quarter or 2018 (up 66%) and third quarter (up 62%). It means that Google properties are not growing traffic volumes as quickly to make up for declines in advertising prices.
Ruth Porat, Alphabet's finance chief, said on the earnings call with analysts that most of the deceleration is related to YouTube, which "represents the vast majority of total clicks."
Porat said, "While YouTube clicks continue[d] to grow at a substantial pace in the first quarter, the rate of YouTube click growth decelerated versus what was a strong Q1 last year reflecting changes we made in early 2018, which we believe are overall additive to the user and advertiser experience."
Investors had high hopes coming into the report with the stock surging 24% for the year and closing at a record on Monday. The stock has joined a broader rally across the tech industry.
Traffic acquisition costs (TAC) in the period were $6.86 billion, while analysts expected $7.26 billion. This metric represents the payments Google pays to companies like Apple to be the default search engine on their browser.
Alphabet recorded a European Commission fine of $1.7 billion in the quarter as a settlement for stifling competition in the online ad sector. Excluding the fine, the company's operating income rose 26% to $8.31 billion. Total cash and marketable securities rose 4% to $113.5 billion.
Google has pinned much of its future growth on the emerging areas of its business as cost per clicks (CPC) decline. The company's hardware and cloud businesses are included in Google's "other revenues" segment, which saw a 25% increase to $5.45 billion.
Headcount growth in cloud was the biggest driver of the company's increase in operating expense, Porat said on the call. A big chunk of Google's costs in recent quarters has been dedicated to bolster the cloud business, which is trying to keep pace with market leaders Amazon Web Services and Microsoft Azure. Longtime Oracle executive Thomas Kurian was named CEO of Google's cloud group in November.
He said at a conference in February that Google's cloud business will "accelerate the growth even faster than we have to date." Porat said on Monday that capital expenditures will increase this year but "at a meaningfully lower rate than in 2018."
Alphabet's so-called "Other Bets," which include its self-driving startup Waymo and health venture Verily, remain very small, with revenue of $170 million, up from $150 million a year ago.
It's the second straight disappointing quarterly report for Alphabet. After fourth-quarter numbers were released, shares of Alphabet fell because of higher-than-expected capital expenditures and a lower operating margin.
Separately, Alphabet stands to gain billions of dollars from its investments in two of biggest tech IPOs this year: Uber and Lyft. It owns about 5% of each company.