Alphabet shares slide after rare earnings miss

/ CBS/AP

San Francisco — Shares of Google-parent company Alphabet is sliding the back of a rare earnings miss by the Internet giant. The stock was down 8 percent on Tuesday, extending a similar decline in trading after markets closed on Monday, and lopping more than $60 billion off its market value.

Google's advertising revenue, its key moneymaker, grew by 15 percent to $30.7 billion — slower than investors had hoped. Its digital-ad rivals Facebook and Amazon, meanwhile, both reported strong earnings last week, adding to the investor surprise when Alphabet stumbled despite a strong economy.

Alphabet executives deflected concerns of growing competition on a conference call with analysts Monday, instead suggesting that fluctuating currency rates and changes to Google ad products during the quarter led to the slowdown. The online-ad industry is also still in a years-long shift to phone and tablet ads and away from ones aimed at desktop users. Ads for mobile devices bring in less money.

"While the growth outlook is modestly lower for 2019, we believe growth remains solid given Google's scale," Raymond James analysts said in a research note.

Ad business slowing

Still, the results sparked concerns that Google's enormously profitable advertising machine might be starting to sputter. Some analysts suggested it's a signal that Google might need to diversify its business more quickly.

"Does this put more pressure on Google to make more aggressive bets on cloud?" asked Wedbush Securities analyst Dan Ives.

Google executives highlighted the company's cloud-computing business as one of its fastest growing segments during the Monday call. But the cloud currently accounts for only a small slice of Alphabet's overall revenue. The company reported $5.4 billion in "other" revenue, which includes cloud, hardware and Play Store purchases.

Google jumps into the gaming industry with new streaming service

"We feel very positive about the enormous opportunities ahead involving Search and Assistant, capturing new ad budgets, cloud computing, AI and other areas," said CEO Sundar Pichai in a conference call with analysts.

Hardware sales also slowed during the quarter for the Pixel phone, Google chief financial officer Ruth Porat said on Monday's call, reflecting a broader industry slowdown in smartphone sales. "Hardware results reflect lower year-on-year sales of Pixel reflecting in part heavy promotional activity industry-wide given some of the recent pressures in the premium smartphone market," she said.

EU hit still to come

Alphabet reported a first-quarter profit of $8.3 billion, down 6 percent from $8.9 billion in the year-earlier period. Profit amounted to $11.90 per share, well above Wall Street estimates of $10.60.

That figure doesn't include an expected charge of $1.7 billion to account for a European Union antitrust fine. The fine was imposed in March for anti-competitive practices in Google's advertising business, referring to a specific exclusivity practice Google now says it has ended.

Google and Facebook, along with other internet companies, are feeling rising heat from regulatory bodies around the world as people and governments question their privacy practices. Some regulators express concern that the largest companies are so big that they're stifling competition.

Including the fine, Alphabet's profit of $6.7 billion fell short of analyst estimates. Excluding advertising commissions that Google pays to customers, Alphabet's overall revenue was $29.5 billion — also falling short of the $30 billion analysts were expecting.

Alphabet also reported widening losses in its "Other Bets" category — a broad segment that includes experimental ventures such as self-driving car business Waymo and internet-balloon subsidiary Loon. Losses grew to $868 million from $571 million a year ago.

First published on April 30, 2019 / 10:40 AM

© 2019 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

Violent attacks against U.S. Jewish community doubled last year

A total of 46 states saw anti-Semitic incidents, according to the Anti-Defamation League

9M ago

Alphabet shares slide after rare earnings miss

Slowing ad sales have some analysts worried that search giant's core business is starting to sputter

10M ago

Engine inspections ordered for some Boeing 737 Max jets

Engine maker CFM has told several airlines, including American and Southwest, to do the inspections

45M ago

Teen runs 100-meter dash in 9.98 seconds

The senior from Houston may be the fastest high school runner in the country

56M ago

Record-low mutual fund fees put more dollars in investors' pockets

Last year saw funds take the least amount in fees ever, but a fund with the lowest fee isn't always the best one

1H ago

John Hickenlooper unveils plan to "re-energize trade with the world"

Hickenlooper's plan proposes more trade cooperation and includes adding climate change goals into trade agreements

2H ago

Georgia's Stacey Abrams says no to Senate run

Abrams says she's committed to helping elect a Democrat to the seat next year

1H ago

Obama says Biden is "nowhere close to finished" in new campaign ad

"He could not have been a more effective partner in the progress that we've made," Obama is quoted as saying about Biden

updated 55M ago

GOP female doctor appeals to women in race for Walter Jones' seat

Dr. Joan Perry is one of 17 GOP candidates vying for a seat in North Carolina's Third Congressional District. Voters go to the polls Tuesday

updated 34M ago

White House to meet with Democrats on infrastructure without a concrete plan

The White House has invited top Democrats to the White House to hear "what the Democrats want to say, and we will try to react to that"

updated 20M ago

Indian army tweets photos of "Yeti footprint"

The army's tweet, which has been mercilessly mocked on social media, suggested the "elusive snowman" had only been seen once before in the Himalayas

updated 54M ago

Museum chides German anti-Islam party's use of "Slave Market" painting

But the Massachusetts art museum can't legally challenge the far-right AfD party's use of a 19th-century portrayal of a slave auction

2H ago

Venezuelan opposition leader tries to stage military uprising

Juan Guaido appears in video with some troops, calling on rest of Venezuela's security forces to turn on embattled President Nicolas Maduro

updated 23M ago

Japan's Emperor Akihito officially announces abdication

His son will replace him after a 30-year reign marked by efforts to make amends for World War II and bring the ancient monarchy closer to the people

2H ago

Winnie-the-Pooh forest goes up in flames

Ashdown Forest, the inspiration behind the "Hundred Acre Wood" is being destroyed by flames

11H ago

2019 Tony Awards: Full list of nominees

"Hadestown" earned 14 nominations – the most of any production this year – followed by The Temptations bio musical "Ain't Too Proud" with 12 nods

2H ago

New on Netflix, Hulu and Amazon

Shows and movies you'll want to stream in May

Apr 26 36 photos

Tony Awards 2019 nominations revealed

Two-time Tony Award winner Bebe Neuwirth, two-time past Tony nominee Brandon Victor Dixon and “CBS This Morning” co-host Gayle King reveal the nominees for some of the top categories from the 2019 Tony Awards.

1H ago 05:38

Bebe Neuwirth, Brandon Victor Dixon on Tonys

Two-time Tony Award winner Bebe Neuwirth and two-time past Tony nominee Brandon Victor Dixon speak with "CBS This Morning" co-host Gayle King ahead of the announcement of Tony Award 2019 nominees.

1H ago 02:38

Director John Singleton dies at 51

Tributes are pouring in for groundbreaking director John Singleton. He died Monday at age 51 following complications from a stroke. Singleton's movies are being remembered for bringing the stories of black Americans into the center of Hollywood and popular culture. At 24 years old, he became the youngest-ever and first black nominee for best director at the Oscars for "Boyz N the Hood." Vladimir Duthiers reports.

1H ago 03:07

Alphabet shares slide after rare earnings miss

Slowing ad sales have some analysts worried that search giant's core business is starting to sputter

10M ago

Chase tweets about budgeting, gets burned by Twitter

The bank, whose CEO made $31 million last year and which was on the receiving end of U.S. bailouts, has since deleted the tweet

16H ago

Angie's List favors its own advertisers, consumer group warns

Consumer Federation of America urges users of the popular ratings site to ignore its recommended businesses

2H ago

Computer outages impact several airlines

A technical issue with the Sabre software used by multiple airlines left flights delayed and customers temporarily unable to check-in or book travel

10H ago

Cleveland airport computers hacked last week

The FBI is investigating a hack on the computer systems at Cleveland Hopkins International Airport

20H ago

Science

Universe is younger and expanding faster

CBS News contributor and physicist Michio Kaku joins CBSN's Elaine Quijano to discuss a new study that says the universe is younger and expanding faster than previously thought.

12H ago 04:18

NASA troubleshoots space station power glitch

Upcoming SpaceX cargo launch could be delayed if space station power glitch isn't quickly resolved

16H ago

Flooding kills dozens in heavily-deforested Indonesia

Cutting down of trees and inappropriate land use has left the country vulnerable, as the death toll from flooding and landslides shows

Apr 29

Seaweed pods replace plastic bottles at London Marathon

They are designed to be both edible and biodegradable — the pods themselves are tasteless, and if not consumed, biodegrade within six weeks

Apr 27

Climate change worsens economic inequality, scientists say

Global warming has harmful effects on the economies of hot countries, but boosts the GDP of colder countries

Apr 26

"Not a harmless childhood illness": Measles cases top 700

This is the highest number of cases since the disease was declared eliminated in the United States

12H ago

Cancer survivor with cerebral palsy now a CrossFit trainer

The 29-year-old continued to work out through her treatment and she says being physically fit saved her life

23H ago

Burger King to sell vegan Whopper across U.S. by end of the year

Fast-food chain is latest to add plant-based patties to its menu, with veggie sliders already on sale at White Castle

Apr 29

The disturbing metaphors of abstinence-only sex ed

Abstinence-only sex ed is taught in 37 of the 50 states – and it often utilizes a slew of metaphors to scare kids away from premarital sex

Apr 29

America's sex ed controversy: Can you teach consent?

Many college campuses are holding discussions about consent, but advocates want the conversation to start as young as kindergarten

Apr 28

Is this record-setting stock market setting up investors for a fall?

If you're worried that stock prices can't get much higher, you might want to review this list of market indicators

5H ago

Chase tweets about budgeting, gets burned by Twitter

The bank, whose CEO made $31 million last year and which was on the receiving end of U.S. bailouts, has since deleted the tweet

16H ago

Alphabet shares slide after rare earnings miss

Slowing ad sales have some analysts worried that search giant's core business is starting to sputter

10M ago

The rise of female gun ownership and fashionable "carrywear"

Alexo Athletica designed a pair of Lulelemon-like leggings with pockets for guns — and women gun owners took notice

Apr 26

Engine inspections ordered for some Boeing 737 Max jets

Engine maker CFM has told several airlines, including American and Southwest, to do the inspections

45M ago

Crime

Jury deliberates deadly Minn. police shooting

Jury deliberations continue Tuesday in the trial of a former Minneapolis police officer who shot and killed an unarmed yoga teacher. Mohamed Noor faces several charges in the death of Justine Damond, who called 911 to report a possible sexual assault near her home in July 2017. Noor says he was startled by Damond on the scene and shot her, fearing an ambush. Adriana Diaz reports.

2H ago 02:54

Funeral held for woman killed in Calif. synagogue shooting

Lori Gilbert-Kaye was killed when a gunman entered a California synagogue and opened fire on worshippers

16H ago

Funeral held for synagogue shooting victim

A funeral service was held Monday for a woman killed by a gunman who attacked a California synagogue over the weekend. New details are also emerging about the investigation. David Begnaud reports.

12H ago 02:46

Veteran accused of planning attack

Authorities said they've foiled a chilling terror plot in Southern California. A former soldier is accused of planning to bomb a white supremacist rally in Long Beach. Jonathan Vigliotti reports.

12H ago 02:26

2020 Dems respond to synagogue attack

Democratic candidates responded to the the deadly shooting at a synagogue Saturday. CBSN political reporter Caitlin Huey-Burns, and a CBSN political contributor and Democratic strategist Joel Payne join CBSN's "Red & Blue" to discuss.

11H ago 08:58

NASA troubleshoots space station power glitch

Upcoming SpaceX cargo launch could be delayed if space station power glitch isn't quickly resolved

16H ago

NASA just detected the first "marsquake"

For the first time since its mission began, NASA's InSight lander has detected what scientists believe to be a marsquake

Apr 23

"Marfa Martians" sending their science experiment to space

The team, made up of 10 and 11-year-olds, want to find a way to kill bacteria in space

Apr 22

SpaceX suffers Crew Dragon engine test anomaly

SpaceX suffers engine "anomaly" in Crew Dragon test vehicle during Cape Canaveral engine test

Apr 20

Evidence found for first molecule in the universe

"This molecule was lurking out there, but we needed the right instruments," a top NASA scientist said

Apr 17

Private secrets shared via postcard

Since 2004, hundreds of thousands of anonymous contributors with something to get off their chest have sent postcards to the website PostSecret.com

Apr 28 32 photos

Met Gala 2019: Craziest looks of all time

The bigger the tiara — or pope hat — the better! (Just ask Rihanna, Katy Perry or Sarah Jessica Parker … )

Apr 26 47 photos

New on Netflix, Hulu and Amazon

Shows and movies you'll want to stream soon

Apr 26 36 photos

Jason Corbett murder: A look at the evidence

In August 2015, former FBI agent Tom Martens and his daughter Molly Corbett admitted killing her Irish-born husband Jason Corbett, insisting they beat him in self-defense with a brick paver and a baseball bat because Jason was choking Molly and threatening to kill her

Apr 20 11 photos

Photos: Fire burns Notre Dame Cathedral in Paris

On April 15, 2019 flames erupted at the landmark cathedral, the most-visited landmark in the French capital

Apr 16 46 photos

Popular

"Middlescence": How to welcome middle age

One expert on aging wants to turn middle age stereotypes on their head. Life coach Barbara Waxman is raising awareness for what some call “Middlescence," which she defines as a transitional period between ages 45 and 65 where people have an increased desire to find or create greater meaning in life. Waxman joins "CBS This Morning" to offer tips on redefining happiness and living your best life.

1H ago 05:06

Tony Awards 2019 nominations revealed

Two-time Tony Award winner Bebe Neuwirth, two-time past Tony nominee Brandon Victor Dixon and “CBS This Morning” co-host Gayle King reveal the nominees for some of the top categories from the 2019 Tony Awards.

1H ago 05:38

Bebe Neuwirth, Brandon Victor Dixon on Tonys

Two-time Tony Award winner Bebe Neuwirth and two-time past Tony nominee Brandon Victor Dixon speak with "CBS This Morning" co-host Gayle King ahead of the announcement of Tony Award 2019 nominees.

1H ago 02:38

Autism diagnosed as early as 14 months: study

A new study in JAMA Pediatrics suggests children could be diagnosed as early as 14 months. Dr. David Agus joins "CBS This Morning" to discuss the latest research. Autism is a spectrum disorder that may affect social skills, behavior and communication.

1H ago 03:31

Japan Emperor Akihito abdicates throne

Tuesday marks the end of one royal era in Japan and the beginning of another. Eighty-five-year-old Emperor Akihito is abdicating the throne to make way for his oldest son. It's the first time in more than 200 years that a living Japanese emperor has stepped down. Elizabeth Palmer reports from Tokyo.

1H ago 02:24