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Alphabet reports third-quarter results amid digital ad cuts


Google’s Mother Alphabet (GOOG, GOOGLE) will report its third-quarter earnings on Tuesday as the digital ad market is hit by budget cuts amid a widespread economic slowdown.

Here’s what analysts are expecting from the company for the quarter, compiled by Bloomberg, compared to how it performed in the same period last year.

Alphabet split its stock from 20 to 1 in July, reducing expected earnings per share from last year. The company is expected to bring in $57 billion in ad revenue for the quarter and $63.98 billion in services revenue.

Alphabet generated $53 billion in ad revenue and $59.9 billion in services revenue in the third quarter of 2021. The digital advertising market has been hit by a decline in spending over the past few quarters. , as companies withdraw their budgets amid rising inflation and interest rates.

Google CEO Sundar Pichai delivers the Google I/O conference keynote, Wednesday, May 17, 2017, in Mountain View, California.  to become an even more influential force in people's lives.  (AP Photo / Eric Risberg)

Alphabet CEO Sundar Pichai. (AP Photo / Eric Risberg)

Social media companies have been particularly affected by the cuts, with Snap reporting a $360 million net loss and revenue growth of just 6%, its lowest ever. Meta’s Facebook has faced similar setbacks, with the company reporting a more than year-long fall in revenue for the second quarter. That company will report third-quarter earnings on October 26.

But Snap and Meta are also dealing with the aftershocks of Apple’s iOS privacy changes, which limit their ability to collect user data on the web that they use to sell ads. However, Alphabet can still collect a lot of user data through its search app and YouTube, providing advertisers with a safe haven from Apple’s privacy changes.

Alphabet is still not immune to the impact of the recession. According to BloombergThe search giant slashed projects at its Area 120 incubator and required workers on the team to reapply for jobs elsewhere within the company.

And according to CNBCCEO Sundar Pichai was forced to address questions from employees who accused the company of cutting costs as Alphabet was posting record profits.

Investors will also be looking for growth in Alphabet’s Google Cloud business, which is trying to grow into a strong competitor to Amazon’s AWS services and Microsoft’s Azure. According to Synergy Research GroupMicrosoft controlled 21% of the cloud market in Q2. Amazon held 34% of the market, while Google had 10%.

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