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GOOGL delivers the quarter we've been waiting for and earns the highest dividend

Alphabet CEO Sundar Pichai at the Google I/O Developer Conference in Mountain View, California, May 10, 2023.

David Paul Morris | Bloomberg | Getty Images

alphabet released its first-quarter knockout report on Thursday, with sales, operating margins and profits all beating Wall Street expectations. The search giant also reloaded its share buyback program and began paying a quarterly dividend for the first time in its history.

Summarize this content to 100 words Alphabet released a knockout report for its first quarter on Thursday, with sales, operating margins and profits all beating Wall Street expectations. The search giant also reloaded its share buyback program and began paying a quarterly dividend for the first time in its history. Total revenue for the three months ended March 31 rose 15.4% from a year earlier to $80.54 billion, beating expectations of $78.59 billion, according to estimates compiled by data provider LSEG. Earnings per share rose 62% for the year to $1.89, beating expectations of $1.51, according to LSEG data. Why own Alphabet: Alphabet's Google Search is an invaluable tool for advertisers. The company's YouTube platform continues to increase viewer time and is poised for further growth as the company looks to acquire major league sports rights. Despite the inauspicious start, we believe Alphabet is a leader in artificial intelligence research and believe that over time we will see advances that support the growth of cloud computing. Competitors: Amazon, Microsoft, Metaplatform Portfolio Weight: 2.73% Recent Purchases: March 4, 2022 Started: July 22, 2014 Conclusion This is the earnings report we've been waiting for. Management ultimately stepped up on the most important front, and unsurprisingly, the stock soared nearly 12% in after-hours trading. Alphabet's three main focus areas for investors – Search, YouTube and Google Cloud – all delivered better-than-expected revenue in the quarter, with company-wide revenue beating expectations. Meanwhile, revenue exceeded expectations, mainly due to a very high operating margin of 31.6%. Management continued to reduce its cost base, which resulted in higher overall profitability. Operating profit exceeded expectations for Google's services division, which is based on its search engine business and YouTube, and its cloud computing division, Google Cloud. Other business units, including those with speculative initiatives such as self-driving car company Waymo, reported lower-than-expected losses. Although cash flow generation fell slightly short compared to expectations, management remains confident that he will initiate a quarterly cash dividend of 20 cents per share, and the board plans to increase his additional 70 billion yen. Approved the dollar stock repurchase program. Alphabet joins MetaPlatform and Salesforce as club-owned technology companies to begin paying a dividend this year. Share buybacks are not uncommon, spending $61.5 billion on stock buybacks last year, but the new firepower is highly valued. GOOGL YTD Mountain Alphabet's year-to-date stock performance. Alphabet CEO Sundar Pichai added to the list of bright spots Thursday in prepared remarks that YouTube and Google Cloud will finish the year on pace to exceed $100 billion in combined annual revenue run rate. Ta. This means that the two segments' quarterly revenues will total at least $25 billion by the end of the year. Alphabet has tested our patience in the race for generative artificial intelligence, and we fully defend our position because we believed we had what it took to deliver for our shareholders. There was no. On Thursday night, Alphabet finally jumped the high bar it set for mega-cap technology companies. Coupled with the encouraging updates on AI strategies released earlier this month, perhaps we have reached a tipping point. Given Thursday's excellent report and dividend announcement, we raise our price target from $160 to $190 per share. The stock remains rated at 2. Quarterly Commentary A better-than-expected $46.16 billion in search revenue was driven by retail advertisers, CFO Ruth Porat said on the earnings call. Indeed, she said they are seeing “broad strength across industries.” YouTube's strength stems from its strong performance in both direct response and brand advertising. Chief business officer Philipp Schindler said monetization of YouTube Shorts, the company's short-term video feature that rivals TikTok and Meta's Reels, will now be ad-supported on mobile, tablet, living room and desktop. , continues to improve. Pichai said YouTube's subscription service is also doing well. According to him, YouTube Music and Premium subscribers have exceeded 100 million worldwide, including trial users. Meanwhile, his YouTube TV, the company's TV streaming service, currently has more than 8 million paying subscribers. Google Cloud's 28% growth represents a sequential acceleration from his last three months of 2023, where revenue increased his 25.7%. Notably, management said the sector is benefiting from the “increasing contribution” of AI, a welcome move for investors looking to invest heavily in the hot technology. That's a good sign. “The growth we are seeing across the cloud is driven by the benefits that AI provides to our customers,” Porat said. Alphabet's operating cash flow was slightly lower, but still significantly higher than its net income of $23.66 billion. This is a sign of high quality earnings backed by cash. Capital expenditures came in at $12.01 billion, much higher than expected, but he attributed this spending to overall business strength and his investments in technology infrastructure such as AI servers and data centers. We don't take issue with this because of the facts. The capital expenditure figures explain why free cash flow was slightly below his forecast of $16.84 billion. Still, the company generated an incredible amount of cash to support investments in future growth strategies, such as AI, while returning significant profits to shareholders. Return on EquityIn the January to March quarter, Alphabet returned nearly $14.6 billion to shareholders through share buybacks, partially offset by his $5.3 billion in stock compensation. . The company ended the quarter with $108 billion in cash, cash equivalents and securities on its balance sheet (compared to $110.9 billion at the end of 2023). Alphabet's first-ever dividend will be paid on June 17th to shareholders who owned stock as of June 10th. At 20 cents per share, Alphabet's dividend yield is 0.51% based on Thursday's closing price. This is on par with Meta, Apple, etc. (Jim Cramer's charitable trusts are long GOOGL, AMZN, MSFT, META. See here for a complete list of stocks.) As a subscriber to Jim Cramer's CNBC Investment Club, Jim trades Receive trade alerts before you make them. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in the charitable trust's portfolio. If Jim talks about a stock on his CNBC TV, he will wait 72 hours before executing the trade after issuing a trade alert. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.Alphabet CEO Sundar Pichai at the Google I/O Developer Conference in Mountain View, California, May 10, 2023.David Paul Morris | Bloomberg | Getty Imagesalphabet released its first-quarter knockout report on Thursday, with sales, operating margins and profits all beating Wall Street expectations. The search giant also reloaded its share buyback program and began paying a quarterly dividend for the first time in its history.
https://www.cnbc.com/2024/04/25/googl-delivers-the-quarter-weve-been-waiting-for-with-a-dividend-cherry-on-top-.html GOOGL delivers the quarter we've been waiting for and earns the highest dividend

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