Alphabet Q3 Earnings Disappoint

GOOGL Alphabet

Alphabet (GOOGL) delivered a disappointing third-quarter earnings report as rising inflation and rising interest rates is affecting the advertising sector.

The earnings per share came at $1.06 well below the expectations of $1.25. The growth in revenues is one of the slowest since 2013.

The revenue for the company rose 6% to $69.09 billion below the Wall Street consensus of $70.58 billion. The CFO noticed that the strong US dollar affected the figures and said that revenue growth of 6% would have been 11% in constant currency. He also expects the forex impact to continue into the fourth quarter.

Search service revenue was $39.54 billion below the forecasts of $40.80 billion.

The YouTube sector advertising revenue was reported at $7.07 billion down 2% and also below the forecasts of $7.42 billion.

Total Alphabet advertising revenue rose 2.5% to $54.48 billion, below the expectations of $56.58 billion.

Google said that financial services advertisers, gaming companies, insurance, loans, mortgages and crypto, advertised their products less.

The Cloud sector revenue rose 37% to $6.9 billion topping the expectations of $6.69 billion.

Alphabet stock is trading 5.57% lower at $99.09 in after-hours trading.

Traffic acquisition costs rose to $11.83 billion from $11.5 billion, the headcount costs increased to 186,779 employees from 150,028 employees in 2021. CEO Sundar Pichai said that the company will slow the hiring pace in the next quarters as it will focus

Alphabet Price

Alphabet stock closed the session 1.90% higher at $104.93. GOOGL stock has lost 27% since January 2022 and the market capitalization now stands at $1.34 trillion. The stock has a 52-week trading range between $94.38 to $151.55. Google hit an all-time high at $151.55 on February 2, 2022.

The technical picture for Alphabet stock has improved since it touched the 20-month low at $94.38 on October 13, and now faces strong resistance at $104.50 which provides the 50-day moving average. The next supply zone stands at $109.25 the 100-day moving average. Breaking above the 100-day moving average increases the potential for GOOGL stock to stretch even higher toward the $115,13 price level, the top from August 26, 2022.

Check back for more analysis.

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