Proactive Investors - Alphabet (NASDAQ:GOOGL) Inc (NASDAQ:GOOG) shares fell in afterhours trading Tuesday after ad revenue fell short of expectations.
YouTube ads contributed positively, growing by 16% to reach $9.2 billion, but overall Google ad revenue fell slightly short of analyst predictions, recording $65.52 billion against an estimated $65.8 billion.
That sent shares 4% lower in afterhours trading.
Despite the advertising miss, the parent company of Google reported robust 4Q financial results that mainly surpassed analyst expectations in revenue and profit.
Revenue increased by 13% year-over-year to reach $86.3 billion, exceeding expectations by $1.0 billion on earnings per share of $1.64, which came $0.04 ahead of estimates.
Operating margin expanded to 27%, marking a 4% year-over-year increase.
Google Cloud demonstrated strong performance with a 26% year-over-year increase in revenue, reaching $9.2 billion.
The operating margin for Google Cloud also showed significant growth, rising by 12 percentage points to 9%.
Google Services revenue, excluding traffic acquisition costs was $76.31 billion, surpassing estimates of $75.97 billion.
Analysts at Jefferies noted that the market reaction to the results may be influenced by a combination of the slight revenue beat, concerns about EBIT margin, and the unexpected tax payment, contributing to the decline in the stock price in after-hours trading.