This Internet giant beat earnings estimates by 14 cents in the last quarter, and institutions have recently picked up almost 15 million shares of the company.
Alphabet Inc. (GOOG)
from The Internet Wealth Builder
If you don’t recognize the corporate name, that’s not surprising. Until October 2, this was Google Inc. The name change is part of a previously announced corporate restructuring, with Alphabet (GOOG) as the holding company and Google, YouTube, Android, etc. as separate operating divisions.
The share price soared to its highest level ever after the company released third-quarter results. Alphabet topped estimates with revenue of $18.7 billion, up 13% from a year ago and 21% on a constant currency basis. Revenue would have been almost $1.3 billion more had it not been for the strong U.S. dollar. Using GAAP methodology, operating income was $4.7 billion; net income was just under $4 billion, while fully diluted earnings per share came in at $5.73 for the quarter. Excluding one-time items, earnings were $7.35 per share.
The company cited the increased use of mobile search and a 13% increase in advertising revenue as the primary contributors to the strong performance.
In a surprise move, Alphabet announced that it would use some of its massive cash reserves to buy back about $5 billion worth of its class C shares, which trade under the symbol GOOG. Readers who bought prior to the stock split last April may hold both class A (symbol: GOOGL) and class C shares (symbol: GOOG) in their accounts.
Alphabet currently shows cash and marketable securities on its books worth almost $73 billion. The company has less than $2 billion worth of long-term debt.
Buy on any pullbacks.
Gordon Pape, The Internet Wealth Builder, www.buildingwealth.ca, 1-888-287-8229, October 24, 2015