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Alphabet jumps 1.7% before results miss profit and sales estimates
Alphabet shares rose 1.7% in regular trading before the company reported third-quarter profit and sales below analysts' estimates after the 4 p.m. close. The miss could weigh on the stock and on index funds that hold it.
At Wednesday’s close: S&P 500 +0.28%, Nasdaq-100 +0.55%, Dow +0.19%
Quick Read
- Alphabet shares rose 1.7% in regular trading on Wednesday, before the company reported results.
- Quarterly profit per share and sales came in below the analyst consensus, the average forecast.
- Profit per share fell from a year earlier, but sales grew.
- Trading on Oct. 29 may show how the shares respond to the miss.
What did Alphabet report for the quarter?
Alphabet (Nasdaq: GOOG) reported third-quarter results after the 4 p.m. close on Wednesday. Profit per share and sales came in below the consensus, which is the average forecast of the analysts who cover the company.
Why it matters: Profit per share also fell from the same quarter a year earlier. Sales told a different story. They grew from a year earlier, even though they missed the forecast.
A miss means a result fell short of the bar analysts set. The market reaction often depends on the size of the gap, not just its direction.
How did the shares trade before the report?
In regular trading, Alphabet shares rose 1.7% to close at $322.06, up from $316.83 the day before.
The gain added $29 billion to the company's market value, which ended the session at $1.8 trillion.
Even after the rise, the stock stood 19.3% below its 52-week high of $399.04, the top price of the past year.
The broader market also rose. The S&P 500 gained 0.3% and the Nasdaq-100 added 0.5%. The communication services sector fund fell 0.4%. The technology sector fund rose 0.8%.
Why could the miss matter after the close?
The day's gain came before investors saw the results. Shares that rise ahead of a report can give back ground if the numbers disappoint, though that is not certain.
Sales growth from a year earlier offers a counterpoint. Some investors may give that growth more weight than the profit shortfall.
Alphabet is among the largest companies in the market by value. Its moves can reach the many index funds that hold it, in proportion to its size.
What could happen next for the shares?
What’s next: The next regular session is on Oct. 29. That trading may show how the shares respond to the report with full market participation.
The same morning, at 8:30 a.m., the government is scheduled to publish its advance estimate of third-quarter economic growth. September data on household income and spending is due at the same time, including the PCE price index, an inflation gauge the Federal Reserve watches.
Those reports could move the wider market as well. That may affect Alphabet shares alongside the company's own news.
For readers
What it could mean for you: People who own Alphabet shares directly carry the company's earnings news in full, with no other holdings to offset it. The rise during Wednesday's session came before the results, so it did not reflect the miss on profit and sales. Trading on Oct. 29 could show whether the shortfall weighs on the price, or whether sales growth from a year earlier carries more weight with buyers. Holders of broad index funds may feel any move too, though only in proportion to Alphabet's size in the fund.
Questions and answers
Did Alphabet beat earnings estimates?
No. Alphabet's quarterly profit per share and sales came in below the analyst consensus, according to results released after the close on Oct. 28.
Did Alphabet's sales meet analyst estimates?
Yes. Sales grew from the same quarter a year earlier, even though they fell short of analysts' forecasts. Profit per share fell from a year earlier.
How did Alphabet stock trade before its earnings?
The shares rose 1.7% in regular trading to close at $322.06. The broader market also rose, with the S&P 500 up 0.3%.
When could the market react to Alphabet's results?
The next regular session is on Oct. 29. That trading may show how the shares respond, alongside economic data due at 8:30 a.m. that morning.
The numbers
| Alphabet (GOOG) price | $322.06 |
|---|---|
| Alphabet (GOOG) change | +1.65% |
| Alphabet (GOOG) market value | $1.8 trillion |
| Alphabet (GOOG) 52-week high | $399.04 |
| S&P 500 change | +0.28% |
| 10-year Treasury yield | 5.05% |
Wednesday’s close
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The WallStreetDigest daily arrives at 6:15 a.m. ET every trading day.
Not investment advice.