Google's parent company Alphabet misses earnings, stock tanks 6%

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AE Wealth Management LLC reduced its position in shares of Alphabet Inc (NASDAQ:GOOGL) by 9.9% in the third quarter, according to the company in its most recent 13F filing with the SEC.

Shares of Alphabet dipped more than five per cent after-hours, before steadying with a 2.7-per-cent loss at US$1,149.93. As of now, Alphabet (GOOGL), the parent company of Google has recently posted a record-breaking $110 billion in annual sales for the first time in Google's 20-year history. However this was tempered after expenses jumped 27 percent to $24.7bn (£17.4bn) in the fourth quarter from the year-earlier period.

Google reported "other revenues" of $4.7 billion. Analysts had forecast a profit of $1.85 a share on revenue of $59.83 billion, which included a full quarter of Whole Foods from its acquisition of the grocery chain past year.

Alphabet missed Wall Street's expectations on earnings but beat the revenue expectation of $31.86 billion. Alphabet class A stock has gained 45% in the past 12 months, with the S&P 500 index rising 24%.

Cost of revenues for the quarter increased to $14.27 billion from $10.66 billion a year ago. The information services provider reported $9.70 earnings per share (EPS) for the quarter, missing the consensus estimate of $9.99 by ($0.29).

The increase in revenue and clicks come despite Google's issues with advertisers previous year.

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Google-parent Alphabet suffered a $3bn loss of the final quarter of 2017 after handing over $9.9bn to Uncle Sam due changes in the USA tax system. Google dubs those payments traffic-acquisitions costs, and they're eating up a greater share of Google's revenue.

The company also announced Thursday that on Wednesday, its board approved an $8.6 billion stock buyback of its Class C shares, saying the repurchase would take place "from time to time" through open-market purchases or privately negotiated deals.

The Chocolate Factory also claimed the number of Google cloud deals that bring in more than $1m had more than tripled from 2016 to 2017, and that there are 4m paying G Suite customers.

Alphabet also reported that "other revenue" - a category that includes its cloud business, hardware sales and app store - increased almost 40 percent, to $4.7 billion.

The EU antitrust fine of more than $2bn, and $9.9bn United States tax charge stemming from legislation enacted previous year, made a serious dent in the profits for the firm.

Google chief executive Sundar Pichai was optimistic about the company's prospects in 2018, putting particular focus on the firm's cloud computing investments, developments in machine learning and a renewed drive to improve YouTube for users and advertisers.

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