Alphabet Inc. (NASDAQ: GOOGL) reported third-quarter 2016 results after markets closed Thursday. The search engine behemoth reported adjusted diluted earnings per share (EPS) of $9.06 on revenues of $22.45 billion. In the year-ago quarter Alphabet posted EPS of $7.35 on revenues of $18.68 billion. Analysts were estimating EPS of $8.63 on revenues of $22.05 billion.
The Google segment posted revenues of $22.25 billion, up from $18.53 billion a year ago. Operating income rose from $5.81 billion to $6.78 billion. The operating loss on other (Bets) revenues totaled $865 million, down from $980 million in the year ago quarter.
Revenues at Google websites rose 23% to $16.1 billion and Google Network revenues rose 1% to $3.73 billion. Ad revenues rose 18% to $19.82 billion. Because Alphabet does not break out the source of advertising revenues by desktop vs. mobile, it’s a little hard to draw any conclusion other than an 18% increase is solid.
Traffic acquisition costs paid to Google Network members rose to 70% of Network revenues, or $2.62 billion. Payments to distribution partners totaled $1.56 billion, about 10% of websites revenues. Total traffic acquisition costs rose to $4.18 billion and were flat year over year as a percentage total ad revenues (21%).
Paid clicks on Google websites were up 42% year over year and up 11% sequentially. Paid clicks on the Network members sites were up 1% year over year and sequentially. Aggregate cost per click fell 11% compared with the year ago quarter and was down 5% sequentially.
Capital spending totaled $2.43 billion in the quarter, up 4% compared with the year-ago total.
The company did not repurchase any shares in the quarter but did report that a new repurchase program totaling just over $7 billion was approved earlier this month.
Alphabet did not provide a forecast, but the consensus fourth-quarter estimates call for EPS of $9.65 on revenues of $24.8 billion. For the full year analysts forecast EPS of $34.11 on revenues of $88.59 billion.
Shares traded up about 1.2% at $827.31 in after-hours trading. The 52-week range is $672.66 to $838.50, and shares closed Thursday at $817.35. The consensus 12-month price target was $945.59 before the earnings report.
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