(Reuters) – Alphabet Inc (GOOGL.O) on Tuesday beat analysts’ estimate for quarterly revenue as its Google unit posted double-digit advertising growth despite the economic slowdown from the novel coronavirus.
FILE PHOTO: The logo of Google is seen in Davos, Switzerland Januar 20, 2020. Picture taken January 20, 2020. REUTERS/Arnd Wiegmann
Shares of Alphabet rose 4% to $1,282 following the after-hours release of financial results. Alphabet shares were down about 8% this year at Tuesday’s close.
A booming economy and rising internet usage have driven Google to record revenues in the last few years. But the virus has split those two trends, with consumer spending now plunging and reliance on internet services surging.
Alphabet Chief Financial Officer Ruth Porat told analysts on Tuesday that while users were searching more, they were looking up less commercial topics and advertisers were cutting spending.
“As of today, we anticipate the second quarter will be a difficult one for our advertising business,” Porat said.
Porat said search ad revenue had declined by a “mid-teens percentage” by the end of March compared with a year earlier.
Alphabet’s overall revenue in the first quarter was $41.2 billion, up 13% compared with the same period last year. The average estimate among financial analysts tracked by Refinitiv was $40.29 billion, up 10.87%, ex