By Paresh Dave and Nivedita Balu
(Reuters) –Google parent Alphabet Inc on Tuesday reported first-quarter revenue below expectations as ad sales amid supply-chain and inflation concerns and the war in Ukraine failed to make up for slower-than-anticipated growth in other units.
The world’s largest provider of search and video ads said first-quarter sales were $68.01 billion, 23% higher than last year but below the average estimate of $68.1 billion among financial analysts tracked by Refinitiv, its first miss since before the pandemic.
Alphabet shares fell 4.3% in after-hours trading.
Google advertising sales were $54.66 billion, just above estimates of $54.56 billion. But Cloud sales grew at a slower pace than a quarter ago, and Google’s “other” revenue, which includes app, hardware and subscription sales, were $6.8 billion, below estimates of $7.3 billion.
The results suggest Google is struggling in the latest economic phase of the pandemic, which is bringing elevated interest rates, higher transport costs and shortages of products from couches to cars to infant formula.
Quarterly profit was $16.436 billion, or $24.62 per share, missing expectations of $25.76 per share.
Google is expected to grab 29%, or the leading share, of the $602 billion global online ad market in 2022, at least the 12th straight year it has been on top, according to Insider Intelligence.
Product changes to resolve antitrust concerns and rising competition from companies such as Amazon.com Inc and ByteDance’s TikTok are chipping away at ad sales. Google also cut advertising offerings and other services in Russia following the invasion of Ukraine during the first quarter.
Though Alphabet shares were down over 17% this year entering Tuesday, they have risen nearly 90% over the past two years.
Alphabet bought back over $81 billion in shares over the last two years and on Tuesday said its board had authorized an additional $70 billion in repurchases.
(Reporting by Nivedita Balu in Bengaluru and Paresh Dave in Oakland, Calif.Editing by Sriraj Kalluvila and Matthew Lewis)
