Le giant internet american Alphabet reported Thursday profit margins disappointing, despite strong economic growth, which remains driven mainly by the advertising revenues of its subsidiary star, Google.
His search for new revenue appears to be starting to bear fruit, but its new paris represent heavy investment compared to the turnover generated.
The holding company, Alphabet, under which Google was reorganized at the end of 2015, has seen a climb in the last year its net income from 23% to 19.5 billion, and its sales of 20% to 90.3 billion dollars.
On the last three months of the year, the sales still showed an increase of 22% to $ 26.1 billion, a level that exceeds the expectations of anal ysts.
The growth in net income, however, dropped to 8% ($ 5.3 billion) and earnings per share, which serves as the reference to Wall Street, has only reached 9,36 million dollars, or 28 cents less than the average forecast of analysts.
This has lowered the action Alphabet in electronic trading after the close of Wall Street: it was losing about 2% to 23H50 GMT.
The indicators of growth “solid air”, have been recognized by the analysts of Canaccord Genuity, but the quarterly report shows pressure on margins, which have disappointed investors.
- Effect Pixel ? -
the engine of growth of the Alphabet remains its subsidiary, Google, which gathers since the end of 2015 the historic business of search and online advertising, but also YouTube (video) or Android (mobile telephony), and brings to him the bulk of his profits and income.
As in previous quarters, the chief financial officer of Alphabet, Ruth Porat, has pointed out that the revenue growth in the fourth quarter had been driven by mobile search, YouTube and advertising.
During the traditional teleconference explanatory with analysts, however, it was also recalled that the group was “focused on the increase in additional sources of revenue within Google in the medium and long term.”
The advertising revenue of Google display and a 17% increase to 22.4 billion in the fourth quarter. But its “other income”, which recognized the efforts to develop computer services to the cloud online (“cloud”) and sales of electronic devices soared 62% to $ 3.4 billion.
Canaccord Genuity notes this strong acceleration compared to the third quarter (+39%), seeing it as a possible sign that the new smartphone Pixel, launched at the end of the year, and positioned itself clearly as a rival to the Apple iPhone, has been an important contribution.
Alphabet has not disclosed its sales of smartphones, Ms. Porat merely note that the launch of dev ices (one Pixel, but also the voice assistant for the home Google Home) had represented “a nice contribution” to the results of the fourth quarter.
- paris futuristic still loss-making -
in Addition to “a good momentum in the new areas of investment for Google,” it has also made progress in the paris futuristic of the group.
self-driving Cars, internet balloons, drones, delivery, health, connected home…: Alphabet invests in many projects the benefits are uncertain and distant.
Their cost is since long a subject of concern for investors, and the group has reacted by trying these last few quarters to streamline these investments, for example, by abandoning the idea of using drones as a relay to internet for remote areas (Titan), or by putting on hold the development of a high-cost project network internet fiber-optic ultra high-speed (Fiber).
Its paris futuristic still showed despite an operating loss of more than a billion dollars in the fourth quarter (down 1.1 billion, compared to -1,2 billion a year earlier).
Their turnover shows a net increase, but remain relatively low (+75% to 262 million dollars).
Only three activities generate money for the moment: the branch of home automation Nest, which sells alarms and thermostats that are connected; Fiber, installed in a few u.s. cities; and the subsidiary health Verily, which has established partnerships with pharmaceutical groups such as Sanofi or GlaxoSmithKline, and has yet announced Thursday an investment of $ 800 million with an acquisition of a minority interest of the sovereign wealth fund of singapore Temasek.
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