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Stock in Alphabet, Google’s parent, is up more than 40% over the past year.
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Alphabet crushed expectations and announced plans for a 20-for-one stock split after the market closed on Tuesday. Investors liked what they saw.
The Google parent reported fourth-quarter sales of $75.3 billion, up 32% year over year, with earnings of $30.69 a share.
Analysts polled by FactSet had forecast earnings per share $27.68 share on revenue of $72.3 billion.
“Q4 saw ongoing strong growth in our advertising business, which helped millions of businesses thrive and find new customers, a quarterly sales record for our Pixel phones despite supply constraints, and our Cloud business continuing to grow strongly,” CEO Sundar Pichai said in the company’s earnings release.
The company also announced a 20-for-one stock split, subject to shareholder approval. If approved, shareholders of record at the close of business on July 1 would receive 19 additional shares of the same class of stock for every share they own.
David Wagner, portfolio manager and equity analyst at Aptus Capital Advisors, wrote that the split is the big takeaway, in his view.
“We all know that does not increase the fundamental value of a company,” he wrote. “But from what we’ve seen in the market with TSLA and NVDA, people like to chase stock splits, for some reason.”
Shares were up 7.1% to $2,949.00 in after-hours trading following the report.
Ahead of the report, a major question for investors was how many advertisers are switching to YouTube and Google as social-media firms continue to grapple with Apple’s 2021 advertising-tracking changes.
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