By Paresh Dave
(Reuters) – Alphabet Inc on Tuesday beat fourth-quarter sales expectations as advertising customers unleashed budgets for the holidays, and the Google owner disclosed for the first time that its Cloud unit is losing $5.6 billion a year.
Shares of Alphabet, up 9.5% this year, rose 5% after hours to $2,014.66.
Google’s advertising business, including YouTube, accounted for 81% of Alphabet’s $56.898 billion in fourth-quarter sales, which rose 23% compared with a year ago. Budget cuts by travel and entertainment advertisers in 2020 were nearly made up as the year went on by new spending from retail and other clients who were driven online by the COVID-19 pandemic.
Analysts tracked by Refinitiv had estimated quarterly revenue of $53.129 billion, or growth of 15.31%.
The Cloud disclosure marks a major milestone for Google, which generates more revenue from internet advertising than any company globally. Google for years has faced questions over whether it can spin the cash from its advertising business into a newly profitable venture.
Alphabet said Google Cloud posted a quarterly operating loss of $1.24 billion. Google Cloud sales were $3.831 billion.
(Reporting by Paresh Dave in Oakland, Calif. and Munsif Vengattil in Bengaluru; Editing by Aditya Soni and Matthew Lewis)
