Google, Microsoft beat Street with $110-billion revenue haul

Big Tech’s earnings boom stretched into the third quarter, with the pandemic surge in cloud computing, and a strong rebound in digital advertising, all but confirming 2021 will be a banner year for the sector.

Quarterly revenues of the technology giants Microsoft and Google parent Alphabet soared beyond Wall Street’s expectations, according to figures published on Tuesday.

According to the Financial Times calculation together, the duo posted revenue of $110.4 billion — a combined growth of 33 per cent on last year’s third quarter.

Microsoft Corp’s cloud-based software helped drive robust sales and profit growth, which topped analysts’ estimates for an 11th straight quarter. Revenue in the first quarter, ended September 30, climbed 22 per cent to $45.3 billion, the Redmond, Washington-based software maker said Tuesday in a statement. That exceeded the $43.9 billion average estimate of analysts polled by Bloomberg. Profit excluding a tax gain rose to $2.27 a share, compared with predictions for $2.07. Sales forecasts by division for the current period also topped projections.

Meanwhile, Google parent Alphabet Inc. reported quarterly sales that topped Wall Street estimates, reflecting robust advertiser spending, but disappointing results from its YouTube and cloud-computing divisions weighed on the stock.

Third-quarter revenue, excluding payments to distribution partners, was about $53.6 billion, the company said Tuesday in a statement. Analysts projected $52.6 billion, according to data compiled by Bloomberg. Google CEO Sundar Pichai confirmed the launch of the JioPhone Next smartphone by Diwali during the earnings call of Alphabet.

Twitter reported its quarterly revenue grew 37 per cent and avoided the brunt of Apple Inc privacy changes on advertising that hobbled its rivals, sending its shares up 3 per cent. The social networking site has been working to add new features such as audio chat rooms to attract users, and also rolled out improvements to its advertising capabilities to reach its goal of doubling annual revenue by 2023.

Advertising revenue was $1.14 billion during the quarter ended September 30, in line with consensus estimates. Business Standard