Shares of Google parent Alphabet and Amazon decline sharply following Q3 earnings reports

Shares of Google parent Alphabet and Amazon decline sharply following Q3 earnings reports
Both Amazon and Alphabet reported their third quarter financial results this afternoon. Amazon's net income for the period was $2.8 billion, up from last year's Q3 by a factor of 10. Additionally, the earnings per share figure of $5.75 crushed Wall Street forecasts calling for third quarter earnings of $3.14 a share. Normally, both pieces of news should have resulted in frenzied buying of the stock. Instead, sellers took charge after the report was disseminated.

Instead of the Q3 profits, investors focused on other things. The creator of virtual assistant Alexa and the Echo smart speaker estimated fourth quarter operating income in a range of $2.1 billion to $3.6 billion, below the previous forecast of $3.9 billion for the period. The company also lowered its fourth quarter revenue forecast to a range between $66.5 billion and $72.5 billion, below Wall Street's consensus of $73.79 billion. Considering that the fourth quarter is Amazon's most important period because of the holiday shopping season, investors see this news as being quite negative.

After hours, Amazon's shares are down $162.16, or 9.1%, to $1,620.01. During the regular trading day, the company's stock rose $117.97 to $1,782.17. On September 4th, Amazon's stock hit $2,050.27 making it the second U.S. company in history (after Apple) to reach a valuation of $1 trillion. Since then, Amazon's stock has dropped by 21%.

Google parent Alphabet also reported stronger than expected Q3 earnings today. For the three month period from July through September, the company had earnings per share of $13.06 vs. Wall Street forecasts calling for earnings of $10.42 a share. But revenue of $33.7 billion fell short of Wall Street's $34.04 billion forecast. Google, with revenue of $33.5 billion, made up most of Alphabet's top line during the quarter. Google grossed nearly $29 billion in advertising revenue during the three months.

Paid clicks on Google properties rose 62% year-over-year, but only 10% sequentially. That indicates a possible slowdown in paid clicks; combined with the lower than expected gross, investors started selling Alphabet stock leading to a drop of $45.57 or 4.16% in after hours trading. Alphabet is current trading at $1,050 a share.

source: Alphabet, CNBC (1), (2), (3)

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11 Comments

1. gamehead unregistered

Google and Microsoft deserve the trillion dollar valuation far more than cr@pple.

2. Vokilam

Posts: 1001; Member since: Mar 15, 2018

What qualifications do you have to warrant your rationale?

3. worldpeace

Posts: 3077; Member since: Apr 15, 2016

Their effort to push tech innovations forward.

4. Vokilam

Posts: 1001; Member since: Mar 15, 2018

1. This tag team crap you guys pull by answering questions for your battle buddy is annoying. 2. You didn’t provide any of his qualifications that gives him any credibility to make the case that Apple doesn’t deserve “the trillion dollar valuation” as much as google or Microsoft. 3. Your post has a heavy sentiment that Apple doesn’t innovate, which, based on features that separate iOS devices from android, is just and opinion that has no weight.

6. AmashAziz

Posts: 2869; Member since: Jun 30, 2014

Tag team.....HAHA! That was lit, man!!

7. Leo_MC

Posts: 6151; Member since: Dec 02, 2011

You only deserve what you are able to get yourself. If Google is not there (yet), it's only because it doesn't deserve to be there (yet).

9. Vokilam

Posts: 1001; Member since: Mar 15, 2018

I was hoping, that in time, our pa-mates would mature to comprehend this reality, but as usual you beat them them to it. There are many different metrics that everything has to be measure in - and I notice that android fans blur these lines quite often in order to fit their nerrsrive.

11. Leo_MC

Posts: 6151; Member since: Dec 02, 2011

It's funny to see the passion and/or hate people have for or against a company, considering they have absolutely no connection to that company (maybe - just maybe - some of them have a bunch of stocks). People know so little about business, you have got to adore their naivety. Apple doesn't need Samsung or Google to fail, it needs them to be good. They all make money - big money - from their collaborations rather than waste money fighting (they still fight but they are doing it smarter than ever before); even Nokia - you know Nokia, the company that was almost dead? - understood that money is being made by contributing (and it now makes from patents alone more billions - in profits - than it did when it sold phones - I don't know exactly the figures, but I know that it makes a lot of money without spending a dime). Apple doesn't care that the user uses Google Search and Gmail, as long as he buys an iPhone; Google doesn't care that the user buys an iPhone, a Pixel or a Galaxy, as long as he uses Gmail and Search; Samsung Electronics doesn't care that the user buys an iPhone or a Galaxy, as long as Apple buys displays and ram from... Samsung Electronics; and Microsoft doesn't care which phone everyone uses as long as they use Azure, Windows or Office 365. The only dumb asses in this equation are those that are saying who and what every company "deserves"...

8. Peaceboy

Posts: 640; Member since: Oct 11, 2018

Talking about crap and garbage, its android OS. Now there’s no point of making it a trillion dollar.

10. Vokilam

Posts: 1001; Member since: Mar 15, 2018

Wtf would you say crap like this? I’ve used both - there’s nothing “crap and garbage” about android. And I dare to try and prove your point by naming a few obvious things - and I will name just as many on iOS.

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