Shares in Google parent Alphabet soar after the tech giant’s profits double to £143m per day
Shares in Google parent Alphabet leapt higher after the tech giant’s profits more than doubled to £143million per day.
The company’s internet advertising sales have rocketed as the pandemic drives more people towards online services.
That helped Google’s revenues, mostly from advertising, to rise from £29.6billion to £39.7billion in the first three months of this year, with profits surging up from £4.9billion to £12.9billion.
Google’s internet advertising sales have rocketed as the pandemic drives more people towards online services
It beat forecasts by Wall Street analysts, who had predicted revenues of £30.5billion. Google’s shares surged as much as 6 per cent higher yesterday.
Technology rival Apple was also set to unveil massive earnings for the same period, boosted by strong demand for the company’s gadgets.
The iPhone maker was expected to post second-quarter sales of £55.6billion, up by a third, and profits of £12billion, a rise of almost half.
Tech giants have emerged as the major winners from the pandemic, as lockdown restrictions have pushed families and businesses to rely more heavily on digital devices and services at home.
For Google, that translated into an extra £7.8billion worth of ad sales during the first quarter as businesses followed consumers online, including on its video streaming platform, Youtube.
Sales at its cloud computing division, which provides data storage and website hosting, rose by £913million.
The social networking giant Facebook, which also makes most of its money from ads, is thought to have increased sales by one-third.
Sundar Pichai, Google owner Alphabet’s boss, said: ‘Over the last year, people have turned to google search and many online services to stay informed, connected and entertained.
‘We have continued our focus on delivering trusted services to help people around the world.’
He added: ‘Our cloud services are helping businesses, big and small, accelerate their digital transformations.’
The results are also being seen as a sign that Google services such as search and Youtube may hold on to the gains that they have made during the pandemic.
Some 17 per cent of people in the US, which is the company’s biggest market, had been given Covid-19 vaccines by the end of the first quarter, and in-person dining resumed in many cities last month.
Philipp Schindler, who is Google’s chief business officer, said that consumers ‘are spending more time online. They’re buying more online.’
However, Alphabet finance chief Ruth Porat warned that it was still not certain that the acceleration of the shift to digital would last.
‘It’s too early to forecast the extent to which these changes in consumer behaviour and advertising spend will endure,’ she told analysts.