Alphabet, the parent company of Google, said its quarterly sales in its advertising and cloud businesses beat expectations, partly helped by the impact of the pandemic on its business, and added that it will continue to spend huge amounts of money to hire and set up its affiliates.
Google, which collects more revenue from online advertising than any other company, has benefited from a general shutdown that has prompted retailers and several other corporate customers to invest in online advertising, helping offset falling advertisers in the travel and leisure sectors.
Alphabet recorded a 13% growth in its 2020 sales, which is its slowest growth since 2009 when it recorded 8.5% growth. However, in parallel with its cost cuts, Alphabet increased its stockpile by $17 billion in 2020, bringing its stock to $137 billion.
But now with work on coronavirus vaccines and ad spending rising, the company has said that it will return to a plan to expand the Google Cloud business project by enlarging staff and data centers and integrating AI into more services, as Alphabet’s latest disclosure is that the operating losses of the Google Cloud project amounted to $1.24 billion during the fourth quarter, recording a total loss in 2020 of $5.6 billion, increasing its loss by 21% compared to 2019.
Alphabet’s fourth-quarter earnings rose 43%, boosted by its $3 billion budding investment earnings, to $15.2 billion, or $22.3 per share, beating expectations of just $14.95 per share.
Google’s advertising business, including YouTube, accounted for 81% of Alphabet’s record quarter sales, up 23% from last year to $56.9 billion, and its cloud services sales, also benefiting from the effects of the pandemic, recorded a value of $3.83 billion. The company’s cloud sales will reach $13.1 billion in 2020, up 46% from 2019 sales. Analysts have forecast quarterly cloud sales of $3.82 billion and total company quarterly revenue of $53.1 billion.
Shares of Alphabet rose 8% in extended trades to $2,067, and the company said it expects to increase its operating revenue by $2.1 billion in 2021 after a new assessment of its servers and network equipment extending its life by about a year or more.