Alphabet Inc.'s quarterly revenue fell short of estimates.
Google's parent company, Alphabet Inc., underperformed market expectations for quarterly revenue as a result of lower advertiser spending amid a slowing economy
Google parent Alphabet Inc missed Wall Street's estimates for quarterly revenue on Tuesday as advertisers cut their spending in the face of an economic slowdown.
The negative results reinforced concerns on Wall Street that inflation would continue to hurt advertising spending. Last week, smaller rival Snap Inc.'s slowest revenue growth rate sent inflation fears through the tech sector and temporarily wiped out $40 billion in market capitalization.
Alphabet shares were down 5.8% in trading after the bell.
Alphabet's weak results are a concern for other companies in the sector, especially the ad-reliant meta platform. The Facebook parent, which reported the results on Wednesday, saw shares fall 3.3% on Tuesday.
Google's ad revenue for the third quarter was $54.48 billion, up from $53.13 billion last year, but it fell short of analysts' expectations.
"We are working to realign resources to meet our highest growth priorities," Alphabet Chief Financial Officer Ruth Porat said in a press release.
The company said total revenue for the quarter ended September 30 was $69.09 billion, compared to $65.12 billion a year ago.
Analysts expect average revenue of $70.58 billion, according to Refinitiv data.
"Google's decline in earnings this quarter proves that it is not immune to the challenges facing the digital advertising industry at large," said Jesse Cohen, senior analyst at Investing.com.
Alphabet's net income fell to $13.91 billion, or $1.06 per share, from $18.94 billion, or $1.40 per share, a year ago.
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