Update 30 October
Google Cloud Takes Off in Q3 2023
Alphabet Inc Class A (NSDQ: GOOGL)
Alphabet, the parent company of Google, reported solid third-quarter 2023 results, with earnings and revenue beating consensus expectations. Revenue was $77.3 billion, up 11% year-over-year, driven by strong performance in Search and YouTube and continued momentum in Cloud. Diluted earnings per share were $1.28, up 2% year-over-year.
The company’s Google Services segment, which includes Search, YouTube, and other advertising-driven businesses, generated revenue of $66.3 billion, up 13% year-over-year. Search revenue was up 14% year-over-year in 3Q23, while YouTube revenue was up 16% year-over-year. Both businesses continue to benefit from strong advertising demand.
Google Cloud, the company’s cloud computing platform, generated revenue of $6.9 billion, up 41% year-over-year. The company is gaining traction with enterprise customers as it expands its cloud computing offerings. Alphabet’s Other Bets segment, which includes investments in companies like Waymo and DeepMind, generated revenue of $213 million, up 11% year-over-year.
Clicks Group Ltd (JSE: CLS)
Clicks, a South African retailer and pharmacy chain, reported solid earnings and dividend beats. The company’s turnover was R41.62 billion, up 5.1% year-over-year (y/y), beating the estimated R41.98 billion. Diluted headline earnings per share (EPS) was R10.445, up from R10.327 y/y and beating the estimate of R10.42. Dividend per share was R6.79, beating the estimate of R6.46.
The strong results were driven by growth in all of Clicks’ business segments, including retail, pharmacy, and distribution. The company also benefited from a weaker rand, which boosted its export earnings.
The retail segment was Clicks’s main growth driver, with turnover increasing by 6.2% y/y. This was due to strong sales of health and beauty products and food and groceries. Pharmacy: The pharmacy segment also performed well, with turnover increasing by 4.3% y/y. This was driven by higher demand for prescription and over-the-counter medications.
Clicks’ management said that they are confident about the company’s prospects for the future. They expect to continue to grow market share and profitability in the coming years. Clicks’ management also highlighted the company’s strong cost control measures, which helped to boost profitability. The company’s operating margin increased from 13.8% in the previous year to 14.1% in the current year.
The positive results were well-received by investors, and Clicks’ share price jumped 8.2% on the day.
Meta Platforms (NSDQ: META)
Meta Platforms, the parent company of Instagram and Facebook, reported record sales in Q3 2023, with revenue of $34.1 billion, up 23% from the same period last year. This is the company’s third consecutive quarter of revenue growth, following a period of decline in 2022.
Meta’s rebound is attributed to a number of factors, including a strong recovery in the advertising market, the continued growth of its user base, and the success of its new products and features. While Meta’s results are positive, the company’s shares fell premarket on October 26, 2023, by around 3%. This is likely due to a broader selloff in tech stocks, driven by concerns about rising interest rates and a potential economic recession.
Despite the recent selloff, Meta’s long-term prospects remain strong. The company has a dominant position in the social media market and invests heavily in new technologies, such as augmented and virtual reality.
Sources: CNBC; Bloomberg; The Wall Street Journal; Reuters; Business Insider
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