Google owner posts 23 per cent drop in profits
Alphabet cites investment policy as the cause for fall
Google parent company Alphabet said yesterday it will miss expectations because of its investment in new business ventures. It announced a 23 per cent drop in profits from a year ago. Despite this, revenues for the three months to September rose 20 per cent to more than $40bn (£31.2bn, €36.1bn),
“We’re very focused on investing for the long term. As a result, quarterly growth can vary — and has varied,” Ruth Porat, Alphabet’s chief financial officer, said. Alphabet reported a $1.5bn hit from "unrealised losses on equity investments that we hold."
Investments aside, Alphabet had a good quarter. Growth at Google's advertising business grew to nearly $34bn in the three months, up 17 per cent from the same period in the previous year. Google's other revenues such as cloud services, Google Play and hardware increased nearly 39 per cent.
"We continue to invest thoughtfully in talent and infrastructure to support our growth, particularly in newer areas like cloud and machine learning," added Porat.
Alphabet has reportedly made an offer for an undisclosed sum to acquire Fitbit, the US-based wearable tracking device. Fitbit shares are trading up 31 per cent at 12 noon GMT.