Google Parent Alphabet Misses Revenue Expectations, Stock Declines

Alphabet Inc., the parent company of Google, announced its third-quarter financial results, showing robust revenue growth that nonetheless failed to meet Wall Street's projections. This shortfall led to a significant drop in the company's stock price in early after-hours trading on Wednesday.

The Mountain View, California-based company reported a net income of $26.17 billion for the July-September period, a decrease from the $34.98 billion recorded in the same quarter a year prior. Revenue for the quarter climbed 25% year-over-year to $127.58 billion, but this figure was slightly below the consensus expectation of $127.97 billion among analysts polled by FactSet.

The company's earnings per share stood at $2.12. These results were affected by an $8.7 billion loss on equity investments during the quarter. It was not immediately clear if the reported earnings per share were directly comparable to analyst estimates, which had been around $3.01 per share.

Sundar Pichai, CEO of Google and Alphabet, characterized the quarter as strong, noting that the company is now operating on a "half-trillion dollar revenue run rate." He attributed this momentum to the company's "deep full stack approach," highlighting the 25% year-over-year revenue increase. Pichai also mentioned that the Gemini app, Google's artificial intelligence assistant, has surpassed one billion users, marking it as the fastest-growing product in Google's history.

Following the announcement, Alphabet's shares fell approximately 9% to $295.20 within an hour after the market's close.