You may be interested in reading up on the latest news in the stock market. For example, you may want to know whether Alphabet topped analyst expectations for its quarterly earnings or announced a 20-for-1 stock split. Or you may want to learn about the latest deals in the stock market, such as Alphabet’s acquisition of smartwatch maker Fitbit for $2.1 billion. Regardless of what type of news you’re interested in, you can get it all from the search engines.
Alphabet reported quarterly earnings that topped analyst estimates
Google’s Alphabet unit posted quarterly earnings that topped analyst estimates, with sales up 32% year over year. Sales were up largely because of ad growth, which was driven by retail spending, though the company reported a slight decline in YouTube ad revenue. However, Alphabet is still growing, thanks to the omicron variant. Its supply chain has also been hindered by shortages of various commodities, including gasoline.
Alphabet Inc. topped analyst estimates for the fourth quarter of FY 2021, despite disappointing traffic acquisition costs. Revenues rose 32.4% year over year, reflecting a solid advertiser spending environment and growth in the Google Cloud division. The company also announced a 20-for-1 stock split, which could push the tech giant into the Dow Jones Industrial Average. However, Alphabet is facing challenges relating to year-over-year comparisons and slower search growth, as well as increasing operating expenses.
The company’s cloud business, which includes self-driving car unit Waymo, posted 45% revenue growth over last year. The cloud unit reported an operating loss of $890 million, a reversal from last year’s $1.4 billion loss. Alphabet’s other businesses, such as Waymo and Verily, are also making headway with investors. Other Bets’ revenue was $181 million, down from $331 million a year ago, as the company shifted its focus to these areas.
While Facebook and Snap warned that their ad revenue would be lower this quarter than last, they nonetheless surpassed analyst expectations. Revenues from Google search was up 43% from a year ago and YouTube brought in $7.2 billion in ad sales. But Google’s revenue growth slowed down slightly in 2020, a period when economies were reopening. In addition, the company also announced a 20-for-1 stock split, which must be approved by stockholders.
Fitbit buys smartwatch maker Fitbit for $2.1 billion
The Fitbit company sells sleek activity trackers and smartwatches. These devices range in price from $100 to $200. However, in recent years the company’s business has struggled, with revenues dropping 6% and a net loss of $186 million in 2018. Its stock has been steadily declining since going public in June 2015. The company’s latest wearable, the Versa Lite, hasn’t caught on with consumers as expected.
The Fitbit purchase comes at a time when the company has struggled to grow its business, as smartwatches have pushed their way into its tracker market. However, the company has enjoyed some success with its Versa smartwatch, as it enables users to track their activity, and it has stepped up its healthcare efforts. The acquisition also brings more resources and expertise to the company’s workforce.
The deal brings with it a huge amount of cash. Fitbit is a leading manufacturer of wearable technology. The company has developed proprietary health tracking algorithms and has 29 million active users worldwide. The Fitbit brand has been a leader in the wearable technology space since it was founded in 2007. Google has also been developing Wear OS software for other manufacturers, but the company has been slow to gain traction. The Fitbit purchase could boost Google’s market share in this space.
The purchase puts Alphabet in a competitive position in the health-care market, and a major boost for Google’s hardware lineup. Google already sells smartphones, laptops, smart speakers, and tablets. The new acquisition is expected to close in 2020. In addition to enhancing the hardware division, Alphabet will be able to scale up and make health data more accessible. If Google can make the smartwatch market bigger, this could be the way to go.
Alphabet repurchases $12.6 billion in stock
Alphabet (Google) announced that it is repurchasing $12.6 billion of its own stock. Share buybacks are a way for companies to engineer gains in stock prices and enrich their shareholders. The program was first announced in 2014, when the company repurchased over $1 billion of stock. After a brief spike, it dropped back to a manageable level. The buybacks, which are primarily made to buy back common shares, will continue until Alphabet gets to the point where it can repurchase more stock.
Alphabet has a lot of cash to burn. Last quarter, the company generated 30% operating margins, but its revenue is expected to decline to its slowest pace in 11 years. But it is still a major source of cash. The company is on track to buy back $31 billion of its own stock by 2020. This represents an impressive 69 percent increase from the previous year, and it represents an estimated 73 percent of Alphabet’s free cash flow. The repurchase program is an important tool for Alphabet because dividends can lock companies into long-term fixed payouts and limit their ability to reinvest those profits.
The company’s cloud division, known as Alphabet, reported fourth-quarter revenue of $4.99 billion, slightly ahead of Wall Street expectations of $5.04 billion. The cloud division is seeing impressive growth under new head Thomas Kurian, but still lags behind Amazon Web Services (AWS) and Microsoft Corp. The cloud division has been a great way for Alphabet to increase its share price, but it faces tougher comparisons between its growth in 2022 and the same period the coronavirus emergency is likely to end.
Share repurchases are a common strategy for companies to increase their share value. Companies can buy their own shares at any time, but they tend to increase at times of strong economic activity. Technology companies have been among the biggest repurchasers of their own shares in recent years. Apple, for example, bought back $20.5 billion in shares in the third quarter, accounting for 17 of the 20 highest quarterly repurchases ever. Alphabet’s third-quarter stock repurchases reached $15 billion, while Facebook (FB) purchased $12.6 billion.
Alphabet announces 20-for-1 stock split
Google’s parent company, Alphabet, recently announced that it will begin a 20-for-1 stock split on February 1, 2020. This change will increase Alphabet’s authorized shares of Class A and Class B stock, respectively. The proposed stock split is subject to stockholder approval. It will increase Alphabet’s overall market cap by more than $4 billion. Regardless of the timing or how it will be implemented, the stock split will increase Alphabet’s dividend.
Investors should be aware that the split will make Google stock more affordable for the new class of investors. The price will fall to $138 per share from $2,750. But what does it mean for the future of Alphabet stock? Will it make the company more competitive? And will it make the stock more affordable? We will find out soon. Stay tuned to get the latest news about the split. If you own any Google stock, make sure to watch the news for further updates.
Investors should note that the stock split was announced in conjunction with the company’s quarterly earnings statement. It follows Apple’s recent split, where the company awarded shareholders with three shares for each share they owned. Apple’s stock split was also a success, giving investors three times as much for each share. Alphabet will require shareholder approval before the stock split goes through. If approved, investors will receive an extra 19 shares for each class A share that they own.
The stock split was designed to make shares of four-figure values more affordable for the average investor. It will also help Alphabet stock be more accessible for retail investors. The company’s stock has increased more than 65% in the past year. Shares of Alphabet are now over $3,000 per share. The company hopes that the stock split will make Alphabet stock more affordable and accessible to individual investors.
The news also boosted the company’s stock price. The shares of Alphabet rose over eight percent in the news. They’re trading at $2,975 as of this writing. And investors should take note of Alphabet’s recent EPS results, which showed a sharp decline during the past few years. So what can investors expect from Alphabet’s 20-for-1 stock split?