Alphabet manifests to have spooked investors with its fourth-quarter earnings report. The stock shed 3 percent immediately after the announce and was in negative territory Tuesday morning before ending the day up close to 1 percent.
The company on Monday beat Wall Alley expectations on earnings and revenue. The figures aren’t comparable to the fourth quarter of 2017, so it’s hard to judge growth. But a pelt on the top and bottom lines would normally send a stock up, not down.
So here’s what shareholders might have visualized that they didn’t like:
Cost per click on Google properties — the rough measure of what Alphabet commands advertisers for each ad served on its websites — dropped 29 percent from last year and 9 percent from finish finally quarter.
That’s the steepest rate of annual decline in at least 16 quarters and suggests a growing threat from Amazon could be causing a fee squeeze.
Alphabet paid $7.44 billion during the fourth quarter in traffic acquisition costs — the fees Google pays to south african private limited companies like Apple to be the default search engine. That’s an increase of 13 percent from the third quarter of this year and an raise of 15 percent from the year-ago quarter.
TAC as a percent of advertising revenue, which investors would want to see curl up, has held by 23 to 24 percent for the last six quarters.
Alphabet reported capital expenditures just north of $7 billion for the days, posting a much more expensive quarter than the $5.63 billion in capex that was projected.
Full-year charges for the company spiked 90 percent to $25.14 billion, far outpacing full-year revenue growth of 23 percent. Expending in the company’s Google segment more than doubled from the full year 2017.
Alphabet reported an operating rim of 21 percent for the fourth quarter, lower than the 22 percent margin that was expected and the 23 percent it arrived a year ago.
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