Google parent Alphabet profit surges on mobile, video ads

Thu Oct 27, 2016 8:05pm EDT
 
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By Julia Love and Narottam Medhora

(Reuters) - Google parent Alphabet Inc bested analysts' estimates for third-quarter profit and revenue on Thursday as the search company showed it has honed its core business for the mobile era and is closing in on the next wave of computing.

Propelled by strong advertising on mobile devices and video site YouTube, Alphabet's net income climbed 27 percent to $5.06 billion. Revenue jumped 20 percent to $22.45 billion, marking the search giant's seventh straight quarter of double-digit revenue growth.

The company authorized a $7 billion repurchase of its Class C stock, pleasing investors who had been craving more after a $5 billion repurchase last year.

Google is competing fiercely with social network Facebook Inc for dominance in the fast-growing mobile advertising market. Google Chief Executive Sundar Pichai touted the company's gains in the space, and was bullish about recent product launches such as the Google Assistant, the Google Home smart speaker and refinements to the enterprise cloud business.

The products are aimed at the rise of voice search, which many analysts believe will succeed keyboards and touch screens as a primary way users interact with devices.

"We feel well positioned as we transition to a new era of computing," Pichai said in an conference call. "This new era is one in which people will experience computing more naturally and seamlessly in the context of their lives, powered by intelligent assistants and the cloud."

Shares of Alphabet, the world's No. 2 company by market value, were up 1.6 percent in after-hours trading.

The company posted third-quarter adjusted earnings per share of $9.06, beating expectations of $8.63 a share on revenues of $22.05 billion, according to Thomson Reuters I/B/E/S estimates.   Continued...

 
A Google search page is seen through a magnifying glass in this photo illustration taken in Berlin, August 11, 2015.  REUTERS/Pawel Kopczynski/File Photo