On Friday, shares of Google parent Alphabet Inc. (GOOGL, Financial)(GOOG, Financial) bucked the trend on the back of reporting its first year-over-year revenue decline in history. While shares of other Big Tech companies gained over 5%, both Class A and Class C shares of Google tumbled more than 3% for the day.
Company revenues decline as advertisers pull back spending
Google CEO Sundar Pichai said that although Cloud, Play and YouTube revenues remain strong as people increasingly return to online services and commercial activities, total revenues for the second quarter declined 2% year over year on an as-reported basis and were flat on a constant-currency basis.
Chief Financial Officer Ruth Porat said during the earnings call that Search and other advertising revenues declined 10% year over year as advertisers pulled back spending during the quarter despite picking back up in June. Google revenues of $29.867 billion declined approximately 8% from second-quarter 2019 revenues of $32.494 billion. Additionally, Google Cloud revenues of $3.007 billion underperformed the Refinitiv consensus estimate of $3.06 billion despite increasing approximately 43.2% from the prior-year quarter.
Google shares fall while Facebook, Amazon and Apple soar on strong revenue growth
Class A shares of Google closed at $1,487.95, down 3.28% from the previous close of $1,538.37, while Class C shares closed at $1,482.96, down 3.17% from the previous close of $1,531.45.
On the other hand, shares of Facebook Inc. (FB, Financial), Amazon.com Inc. (AMZN, Financial) and Apple Inc. (AAPL, Financial) gained 8.17%, 3.70% and 10.47% on double-digit revenue growth even in spite of the coronavirus pandemic.
Apple, the top holding of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A)(BRK.B), surged to a new all-time high of $425.04, up 10.47% from Thursday’s close of $384.76 on a new-record revenue and earnings growth for the company’s fiscal third quarter. The surge in the Cupertino, California-based tech giant’s shares helped the Dow Jones Industrial Average rally to a 114.67-point gain, closing at 26,428.32 despite trading at an intraday low of 26,013.59 around midday.
See also
GuruFocus in July launched a new feature in which users can place the stock into one of four virtual baskets: buying, considering, researching and not interested. As of Friday, Apple is in the top 10 of each of the four baskets, with 11 users buying shares, seven users considering buying shares, three users researching Apple as a potential investment and four users dismissing Apple as a potential investment.
Disclosure: The author is long Apple.
Read more here:
- Warren Buffett’s Apple Soars on Strong 3rd-Quarter Sales Growth
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