GOOGLE - SAN FRANCISCO. Google parent Alphabet Inc on Tuesday beat quarterly revenue estimates and announced a $50 billion share buyback as the recovering economy and surging use of online services combined to accelerate its advertising and cloud businesses.
The results are the first sign that Google services may hold on to gains in usage brought on by lockdowns and other pandemic restrictions that forced people to shop and communicate online over the last year.
Alphabet shares were up about 4.7% at $2,398.61 in extended trading.
The results "reflect elevated consumer activity online and broad based growth in advertiser revenue," Alphabet Chief Financial Officer Ruth Porat said in a statement.
Google ad sales surged 32% in the first quarter compared with a year ago, above expectations of analysts tracked by Refinitiv. Cloud sales increased 45.7%, in line with estimates.
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About 17% of people in the United States, Alphabet's top region by revenue, were fully vaccinated against COVID-19 by the end of the first quarter. Activities including in-person dining resumed in big cities in March, and security screenings at U.S. airports had their busiest day in a year.
The changes coincided with Alphabet's overall sales rising 34% to $55.3 billion, above analysts' estimate of $51.7 billion, or 26% growth over last year's first quarter, when ad sales fell significantly in the final couple of weeks.
Alphabet’s quarterly profit rose 162% to $17.9 billion, or $26.29 per share, beating estimates of $15.88 per share. Earnings benefited from unrealized gains from venture capital investments and slower depreciation of some data center equipment.
The company's operating margin rose to 30% for the first time since incorporating as Alphabet in 2015 even as its costs began to pick up again. Alphabet in 2020 suffered its slowest sales growth in 11 years but posted record profit and upped its cash hoard by $17 billion after slowing hiring and construction.
The share repurchase authorization by Alphabet's board follows a $25 billion buyback program announced in 2019. Jefferies analyst Brent Thill estimated Alphabet now has $56 billion left to spend buying its shares.
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