Today was a huge day for Alphabet — the first day it finally broke out its “other bets” in its earnings report — and boy did the company not disappoint.
The company smashed expectations on both ends, bringing in $21.3 billion in revenue and earnings of $8.67 per share. Analysts were expecting earnings of $8.09 on $20.8 billion in revenue.
And with that, Alphabet became the most valuable publicly-traded company in the world — coming in at a market cap $558 billion after jumping about 8%, and passing Apple, which sits at a market cap of $535 billion. That’s of course assuming there are no surprises on the earnings call, but either way this is a significant moment for the company and the technology market in general.
Alphabet had a huge opportunity to finally pass Apple as the most valuable company in the world. There’s a clear narrative here. Alphabet, a software company with a few extra hardware bets, has dramatically outperformed Apple, a hardware company with a few extra software bets.
In the past year, Apple’s stock has not performed well.
Meanwhile, Google’s stock was on the rise for the past 12 months.
Here’s a quick comparison from the past year from Google Finance:
Google’s extraneous operations, like Nest, have never been separate from its core business. So investors have had basically no idea how its other projects are going — and how much they may contribute to the company — other than estimates. Google has gotten into all sorts of other areas, but now we have a rough idea of how those other areas are performing.
So far, that bet is growing in revenue at least: other bets accounted for $448 million in revenue in 2015, up from $327 million in revenue in 2014. That being said, it showed huge widening losses — going to a loss of $3.6 billion from $1.9 billion in 2014.
Google, too, is still not immune to what’s happening with foreign exchange rates and the general global economy. Revenue was up 18% year-over year, though in constant currency it would have risen $24%. Apple, for example, said there was a difference in $5 billion in revenue if not for foreign exchange rates, and for Google that represents about $1 billion in revenue.
We’re updating this post with more information as it comes in.
Source: http://feedproxy.google.com/~r/Techcrunch/~3/06c9TdqdV4U/
