A fall in the shares of Alphabet Inc by 7% was observed after it reported a continuing erosion of its operating margin, missing the quarterly revenue estimates given by analysts for the first time in at least two years.
Investor concerns have been intensified with this result that big investments in new businesses, increasing competition and regulatory scrutiny are causing slow and unpredictable returns.
Analysts had estimated about $310 million revenue; however the overall revenue rose to $33.74 billion a 21% increase. Google ad sales growth slowed to 20% from 24% last year and contributed to 86% in its parent Alphabet Inc.
There have been several factors at play that have caused a slow revenue growth of the company starting with the unfavorable currency exchange rates according to financial analysts. Additionally, the company met the antitrust concerns with lowering the ad pricing. New European privacy rules and increasing competition with Amazon have affected the revenue growth as well. Company’s operating margin fell to 25% from 28% last year due to these reasons coupled with non- advertising revenue not meeting expectations and increasing costs.