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Google-parent Alphabet reports earnings beat

Wednesday, January 31, 2024

Today’s headlines

What’s happening: Shares of Alphabet tanked in after-hours trading on Tuesday, following the release of the company’s fourth-quarter results.

What happened: The tech giant posted better-than-expected earnings for its fourth quarter.

However, Alphabet’s holiday-season advertising sales missing market expectations exerted pressure on the stock.

How were the results: The Mountain View, California-based company reported low double-digit growth in revenues in the three months ended December 31.

  • Revenues rose 13% year-over-year to $86.31 billion, topping the consensus estimates of $85.33 billion.
  • Adjusted earnings came in at $1.64 per share, which exceeded the Wall Street expectations of $1.59 per share.

Why it matters: Alphabet issued an update on layoffs that were announced in January last year. The company recorded employee severance and related charges of $2.1 billion in 2023.

The company’s Google and YouTube divisions have been facing stiff competition for advertising budgets from its peers Amazon.com, Facebook and Instagram.

Alphabet’s ad revenues grew to $65.5 billion in the fourth quarter, from $59.0 billion in the previous year. However, the figure came in short of market estimates of $66.1 billion.

Although Google Cloud’s revenues were above market expectations, due to a boost from AI investment by companies, Microsoft’s Azure recorded faster growth, at 30%, during the same period.

Google Cloud brought in $9.192 billion last quarter, topping market estimates of $8.9 billion. Google Search revenue came in at $48.02 billion, while YouTube advertising revenues were $9.2 billion.

“We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter the Gemini era, the best is yet to come,” CEO Sundar Pichai said during the earnings call.

How shares responded: Alphabet’s shares fell 5.7% to $144.28 in the after-hours trading session, following the release of quarterly results. The stock has gained around 10% over the past month.

What to watch: Investors will continue monitoring rising competition from Microsoft in the AI segment, which could significantly impact Alphabet’s overall results ahead.

The markets today

The Canadian dollar will be in focus today ahead of the country’s GDP report

Context: The CAD/USD forex pair edged higher on Tuesday, rising to a two-week high.

Details: The Bank of Canada had last week held its monetary stance and kept interest rates unchanged for the fourth consecutive meeting.

Strength in the price of crude oil, one of Canada’s major experts, lent support to the Canadian dollar on Tuesday. WTI crude oil gained $1.04 to close at $77.82 per barrel on Tuesday.

Weakness in the US dollar also provided some support to the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.2% to 103.40 on Tuesday.

The CAD/USD forex pair gained around 0.1% to 1.3400 on Tuesday, surging to the highest level since January 15. The S&P/TSX Composite Index added 0.13% to close at 21,227.87, after hitting a 20-month high in the prior session.

What to watch: Investors await the release of economic data on GDP growth from Canada today. Analysts expect Canada’s economy to grow by 0.1% in November, following a flat reading in October.

Data on manufacturing PMI, scheduled to be released on Thursday, will also be in focus. The S&P Global Canada manufacturing PMI, which declined to 45.4 in December, is expected to fall further to a reading of 45 in January.

Markets will also watch the US Federal Reserve’s interest rate decision and monitor changes in crude oil prices.

Other Markets: European indices closed higher on Tuesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.44%, 0.18%, 0.48% and 0.16%, respectively.

The news shaping the markets

Ukraine is reportedly to receive its first lot of the Ground-Launched Small Diameter Bomb developed by Boeing as early as this week. The news sent the safe-haven US dollar index higher in forex trading this morning.


The Philippines reported GDP growth of 5.6% year-over-year for the fourth quarter. This marked a slowdown from the 6% expansion in the prior quarter and exerted pressure on the PHP/USD forex pair.


China’s official NBS manufacturing PMI rose to 49.2 in January, from December’s reading of 49.0. The country’s factory activity contracting for fourth straight month sent the CNY/USD pair lower in forex trading this morning.


Japan’s retail sales grew 2.1% year-over-year in December, easing from November’s 5.4% growth. The latest reading also came in below market expectations of 4.7%, exerting pressure on the JPY/USD forex pair.


South Korea’s industrial production rose by 0.6% in December, slowing from a 3.6% gain in the prior month, which sent the KRW/USD pair lower in forex trading this morning.

What else to watch today

Saudi Arabia’s GDP annual growth rate, value of loans and money supply M3, Germany’s retail sales, import prices, number of unemployed persons, unemployment change, jobless rate and consumer price inflation, Turkey’s balance of trade, tourism revenues and tourist arrivals, France’s inflation rate and producer prices, Spain’s retail sales and current account, Italy’s unemployment rate and industrial sales, India’s infrastructure output and central government budget value, Brazil’s unemployment rate and nonfarm payrolls, South Africa’s balance of trade, US MBA mortgage applications, ADP employment change, employment cost index, Chicago business barometer, crude oil inventories, stocks of gasoline and distillate inventories, Russia’s industrial production and money supply M2, Mexico’s government budget value, as well as UK’s Nationwide house price index.


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