Google parent company Alphabet reported its fourth quarter earnings this afternoon and during the three month period the company recorded a record breaking $56.9 billion in revenue. That was a gain of 31.7% from the $43.2 billion that Alphabet grossed during last year's fourth quarter. It also topped Wall Street expectations of $52.7 billion in revenue. Advertising revenue was $46.2 billion during the quarter, up 22% on a year-over-year basis. Analysts were looking for Google to report $42.3 billion in advertising revenue for the fourth quarter. To generate that amount of business, Google had to spend $10.47 billion in traffic acquisition costs.
Alphabet's fourth quarter profit rose from $9.3 billion last year to $15.7 billion for a 69% hike. Analysts were expecting the company to report a profit of $11.9 billion. According to Google finance chief Ruth Porat, YouTube and Search helped Google perform so well during the period. The executive said, "Consumer and business activity recovered from earlier in the year." Revenue from YouTube ads rose in the fourth quarter to $6.89 billion from $4.72 billion during the same quarter the previous year for a strong 46% increase.
Looking at the bottom line for the fourth quarter, Alphabet made $15.23 billion during the 2020 period compared to the $10.67 billion the company earned in 2019's Q4. That resulted in a 42.7% gain in earnings. Earnings per Share (EPS) rose to $22.30 per share from $15.35 per share.
Google continues to tend to its Money Tree. At the start of the fourth quarter, Alphabet had a cash position of $20.1 billion. By the end of the quarter, that figure was up to $26.5 billion. So using our fingers and toes, we can compute that Google's parent added $6.4 billion in cash during the fourth quarter of the year. Still, it would appear that money seems to disappear in the cloud. For the first time ever, Alphabet released information related to its cloud unit; for the quarter that business took in $3.8 billion in revenue while reporting a loss of $1.2 billion.
Wall Street was smitten with Alphabet's report. Shares of Alphabet, which rose $26.16 or 1.38% to $1,927.51 during the regular trading session, soared 7.66% in after-hours trading after the earnings report was released. During the later trading period, Alphabet was changing hands at $2075.16, up $147.65.