SAN FRANCISCO (Reuters) - Google owner Alphabet Inc (GOOGL.O) reported first-quarter sales and profit Monday that topped financial analysts’ estimates as it achieved better pricing on ads and saw unrealized income from startup investments, sending its shares up about 1 percent after-hours.
The results eased concerns that investment in new ventures beyond its core search business was undermining Alphabet’s outlook. There also were no immediate signs that rising global privacy concerns would affect profits.
Alphabet’s profit margins have fallen in recent quarters as it ramps up costly new projects in cloud computing and hardware at its core Google unit, and despite spending cuts on an unprofitable set of ancillary initiatives known as “other bets.”
But quarterly profit of $9.4 billion, or $13.33 per share, exceeded estimates of $6.56 billion, or $9.28 per share, according to Thomson Reuters I/B/E/S. About $3.40 of the earnings per share were attributable to a new accounting method for unrealized gains in Alphabet’s investments in startups such as Uber Technologies Inc [UBER.UL].
Excluding the investment-related gains and other items, adjusted earnings were $9.93 per share, topping the $9.28 per share consensus.
The price for clicks and views of ads sold by Google rose in its favor as advertisers pursued ad slots on its search engine, YouTube video service and millions of partner apps and websites.
Investor appetite for Alphabet has been weakened by a combination of cost and regulatory concerns as officials across the world seek to force changes in Google’s business practices, such as giving customers more control over privacy of their data. Shares had fallen nearly 3.5 percent this year until a swift pre-earnings rebound