Will Google ETFs Keep Shining On Q3 Earnings Optimism?

Google-parent Alphabet (GOOGL) recently reported third-quarter 2020 results, with earnings and revenues topping estimates and increasing on a year-over-year basis. Notably, Alphabet’s share price surged 6.5% in after-hour trading on impressive earnings results.

Q3 Earnings at a Glance

Earnings per share were $16.40, beating the Zacks Consensus Estimate of $11.40 and increasing 61.9% sequentially and 62.1% year over year. Net revenues, excluding total traffic acquisition cost or TAC (TAC is the portion of revenues shared with Google’s partners, and amount paid to distribution partners and others who direct traffic to the Google website) came in at $38.01 billion, gaining 20.3% sequentially and 15.1% year over year. Net revenues surpassed the Zacks Consensus Estimate by 7.5%, largely on strong performances by the company’s search, cloud and YouTube businesses.

Alphabet’s business segments include search, advertising, Play, hardware, and Cloud & Apps. Revenues from Google-owned and partner sites within the search business rose 9.9% and 8.9% year over year, making for 68% and 12.4% of quarterly revenues, respectively. Consequently, there was a year-over-year rise of 9.8% in total advertising revenues. YouTube advertising revenues surged 32.4% year over year to $5 billion, contributing 10.9% of quarterly revenues. Google other revenues — which consists of YouTube non-advertising revenues — were $5.5 billion for the third quarter, increasing 35.3% year over year. Moreover, Google cloud grew 44.8% year over year to $3.44 billion, accounting for 7.5% of quarterly revenues. Notably, with aggravating coronavirus outbreak, some industries including cloud computing have been thriving with majority of people working from home.

Meanwhile, TAC rose 22% sequentially and 9% year over year.

ETFs in Focus                      

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