Shares of Alphabet, the parent company of Google, jumped 9% off-bid after posting record earnings and Q4 2021 earnings that beat analysts' forecasts. Alphabet also announced a 20-for-1 stock split that will take effect in July.
Alphabet's financial report for 2021, published on Tuesday, February 1 after the close of trading, exceeded Wall Street's expectations.
Shares of Alphabet (GOOGL, GOOG) are up 9% off-trade to $3,003.10 per share of Class A GOOGL, offsetting losses since early 2022 (GOOGL shares are down almost 5% year-to-date on Tuesday).
Google's management noted strong growth in its core digital advertising business driven by retail consumer demand for online shopping, "while retail, finance, entertainment and travel advertisers have increased marketing budgets," as well as continued strong growth in the region's Google Cloud business.
The company also called the reporting quarter a record quarter for sales of Pixel smartphones, despite chip supply restrictions.
Alphabet Q4 & 2021 Financial Report vs. Market Analyst Forecasts
Alphabet's quarterly earnings per share (three months ending December 31) rose 38% year-over-year to a record $30.69, higher than analysts' forecasts of $27.34.
Profit was $20.64 billion compared to $15.23 billion in Q4 2020.
Total revenue rose 32% to its highest historical value of $75.33 billion. Quarterly revenue and earnings statistics on the Google Reports page.
Google's advertising revenue for the quarter rose 33% to $61.24 billion, of which YouTube accounted for $8.63 billion (up 25.3%), below median analyst forecasts of $8.87 billion.
Quarterly revenue from Google Cloud grew by 45% to $5.54 billion.
Sundar Pichai, CEO of Alphabet and Google, said the company posted a 65% increase in new cloud deals year-over-year to over $1 billion.
At the end of 2021:
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Alphabet's total revenue rose 41% to $257.64 billion;
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earnings per share nearly doubled to $112.2;
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total annual profit increased by 88.6% to $76 billion;
Alphabet stock split
Alphabet's board of directors approved a 20-to-one stock split for Class A, Class B, and Class C stocks. For stock classes, read “ Which Google Stock to Buy: GOOG or GOOGL?” ” and “ What are the shares / Types of shares ”.
The share split is subject to shareholder approval and, if approved, each of the registered shareholders at the close of business on July 1, 2022 (the “Registration Date”) will receive after the close of business on July 15, 2022, 19 additional shares of the same class per share, owned by such shareholder at the date of registration.
Shares of Apple (AAPL) and Tesla (TSLA) surged in 2020, while shares of Nvidia (NVDA) rebounded in 2021 after a split. Splitting is used to make stocks more accessible and potentially eligible for inclusion in more market indices.
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