Google parent reveals coronavirus ad hit but revenue still surges to $41bn | Business News

Google’s parent company has revealed a 13% surge in first quarter revenue despite a “significant” hit to advertising sales as the coronavirus crisis gathered pace.

Alphabet – the first of the five big US tech firms to report on their progress during the pandemic – recorded revenue of $41.2bn between January and March.

Shares – 8% down in the year to date amid the stock market chaos since March – rose more than 3% in after-hours dealing on Wall Street when Alphabet’s figures dropped.

Analysts suggested the revenue figure had settled some nerves over an uncertain picture for the big five – also including Amazon, Microsoft, Apple and Facebook – as companies and consumers alike cut back on their spending in reaction to the COVID-19 crisis.

Lockdown conditions across key markets in Europe and North America meant there was little incentive to advertise in areas such as travel and leisure.

The 13% revenue growth figure represented the weakest rise in first quarter sales for five years.

Google ad sales were $33.8bn – a rise of 10% on the same period last year.

Advertising, mainly via Google, remains the most important constituent of Alphabet’s earnings as it accounts for around 80% of revenue on an annual basis.

Chief financial officer Ruth Porat told investors: “Performance was strong during the first two months of the quarter, but then in March we experienced a significant slowdown in ad revenues.”

The cloud business generated $2.8bn in revenue, up 52%, while YouTube ad sales topped $4bn – a third up on a year ago.

The company, which does not give guidance on its future earnings’ expectations, has already implemented a series of cost-cutting measures including slowing down the pace of hiring and marketing.

Alphabet’s total costs and expenses rose about 12% in the first quarter from a year ago – topping $33bn.

Ms Porat added: “We are sharpening our focus on executing more efficiently, while continuing to invest in our long-term opportunities.”