Back in July, Google parent company Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), reported its second-quarter earnings, narrowly missing revenue and earnings expectations.
Still, the tech titan’s stock rose as much as 4.5% to highs of $107.74 in after-hours trading back then, reflecting its resilience amid slowing growth in advertising.
Here’s what Google’s last quarter looked like:
- Earnings per share (EPS): $1.21 vs $1.28 expected
- Revenue: $69.69 billion vs $69.9 billion expected
- YouTube advertising revenue: $7.34 billion vs. $7.52 billion expected
- Google Cloud revenue: $6.28 billion vs. $6.41 billion expected
- Traffic acquisition costs (TAC): $12.21 billion vs. $12.41 billion expected
Revenue growth slowed to 13% in the July quarter from 62% a year earlier, when the company was benefiting from the post-pandemic reopening and consumer spending was on the rise.
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CEO Sundar Pichai warned his employees that the company was not immune to economic headwinds, and gave guidance saying Google’s challenges would continue through the end of the year.
Pichai wasn’t wrong. But first, a $1,000 investment in Google's Class A common stock at the close on July 26 would’ve yielded an investor 9.48 shares as the stock closed at $105.44 in regular trading.
Back to the second quarter forward guidance. Pichai said then that going forward, the very strong revenue performance from 2021 continued to create tough comps that will weigh on year-on-year growth rates of advertising revenues for the remainder of 2022.
To bring us to the present, Google issued its third-quarter earnings report on Tuesday, reporting its weakest quarter of growth since 2013 except for one other period early in the coronavirus pandemic.
Revenue growth slowed to 6% from 41% a year earlier as the business battles a persistent decline in internet advertising spending — exactly what Pichai warned.
Shares of Alphabet dipped nearly 8% on Wednesday, sliding under the $100 level, marking the stock’s worst one-day performance since March 2020.
Not so good for the $1,000 investment.
Since July 26, the stock has fallen around 8.24%, or $8.65.
So, the $1,000 invested in Google back in July would be worth $913.78 today.
That's a loss of about 8.62%
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