Report comes as company faces internal worker turmoil, and a recent $1.7bn fine from the EU
Google shares slumped on Monday after the company failed to beat analyst predictions, following a year of internal turmoil, privacy concerns, and several international fines.
The companys stock was down 7% in after-hours trading after it reported first quarter revenue of $36.34bn, lower than the $37.33bn revenue forecast by analysts. The quarter one earnings represent a 17% increase from the same time last year, in which it reported $31.15bn in revenue.
In a call with investors on Monday, Googles CEO, Sundar Pichai, said the company would continue to invest more in algorithms on YouTube, following recent incidents that saw the platform offering misinformation, hate speech, and disturbing content targeting children. He also promised to continue to address user privacy concerns.
User expectations around privacy are constantly evolving and we stretch ourselves to meet them, he said. We will have more changes over the course of the year.
Alphabets performance failed to hold up to its main tech rivals such as Facebook, which showed record revenue growth to more than $15bn in the first three months of the year, and Amazon, which has recorded four straight quarters in a row of record profits. Microsoft also had impressive first quarter earnings, beating sales and profit expectations and becoming the third listed US firm to be valued at $1tn.
The earnings report comes after the Nasdaq and the S&P closed at record highs on Friday. As of Monday, Alphabet shares were up 22% year to date, well above the S&Ps gain of 16%.
Google has struggled with internal worker turmoil over the past year, with employees organizing a walkout in November 2018 over sexual misconduct allegations and hundreds of employees signing a letter objecting to the companys treatment of temporary contractors in April. In March, it was hit with a 1.5bn ($1.7bn) by the European Union over misusing its monopoly on advertising. In January, Alphabet was fined 50m (44m) for failing to provide users with transparent and understandable information on its data use policies.
The company reported it added 4,600 employees to its payroll in the first quarter, now employing 103,459 people.
In a call with investors on Monday, Ruth Porat, the chief financial officer of Alphabet, cited external investments as a place for growth in upcoming quarters. Businesses in this category, other bets, claimed revenue of $170m against expectations of $172m and reported an operating loss of $868m.
These non-Google businesses include Alphabet-owned Waymo, which recently announced a self-driving car factory in Detroit, Michigan and Wing, a Google-owned drone delivery service that recently received FAA approval. In April, Softbank invested $125m in Loon, a Google-owned company that aims to expand internet access through high-altitude balloons.
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