Alphabet, formerly Google, sets share buyback, shares jump
SAN FRANCISCO (Reuters) - Alphabet Inc, known until recently as Google Inc, introduced its first share buyback and beat Wall Street's profit forecast on Thursday, sending its stock to its highest-ever level in after-hours trading.
The company's bottom line was boosted by strong gains in mobile search and YouTube advertising, while it kept a tight lid on expenses.
Investors have been pressing the company to return more of its cash pile, but the announcement that Alphabet would buy back up to $5.09 billion of its Class C shares came as a surprise.
"That is an unexpected development that is definitely encouraging given the company's cash balance," said James Cakmak, an analyst at Monness, Crespi, Hardt & Co.
Mature technology companies such as Apple Inc and Microsoft Corp have come under intense pressure in recent years to give back more cash to investors.
Alphabet's shares rose 11 percent in after-hours trading to $722.53, their highest level ever.
Third-quarter revenue rose to $18.68 billion from $16.52 billion a year earlier, above the $18.53 billion, on average, that Wall Street expected, according to Thomson Reuters I/B/E/S.
Net income rose to $3.98 billion, or $5.73 per Class A and B share, from $2.74 billion, or $3.98 per share in the same quarter last year.
Excluding one-time items, the company earned $7.35 per share. That was ahead of analysts' average estimate of $7.21 per share. Continued...