The massive market transformation this month that some on Wall Street called a "once in a decade opportunity" might have just been a one-off technical move because of taxes.Marketsread more
The Pentagon will deploy U.S. forces to the Middle East on the heels of the attack on Saudi Arabian oil facilities, United States Secretary of Defense Mark Esper announced...Defenseread more
CNBC did a deep dive through the most recent Wall Street research to find stocks that analysts say are underappreciated.Marketsread more
Shares of MasterCard are up 46% this year, and 1120% since 2011, getting a boost from the strong U.S. consumer.Investingread more
Trade with China is the 'big unknown' for the Federal Reserve as it decides how best to support the U.S. economy, says Council on Foreign Relations Director of International...Futures Nowread more
Lobbying experts said the visit is likely an attempt to be in lawmakers' ears as they consider legislation that would impact Facebook.Technologyread more
Yardeni Research's Edward Yardeni believes the U.S. economy is picking up steam.Trading Nationread more
Iran's audacious drone and cruise missile attack on Saudi Arabia's oil producing facilities has provided a critical test yet for the Trump administration's foreign policy. A...Politicsread more
Chinese trade negotiators suddenly canceled a visit to meet U.S. farmers after they wrapped up trade talks in Washington this week.Marketsread more
Blackstone Executive Vice Chairman Tony James says he's less optimistic now than before that the U.S.-China trade war could be resolved, but even a smaller deal could help...World Economyread 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.