Alphabet to report Q3 earnings after the bell Tuesday

Alphabet reports third-quarter net connected Tuesday aft the bell.

Here's what Wall Street is expecting.

• Earnings Per Share (EPS): $1.25, according to Refinitiv estimates.
• Revenue: $70.58 billion, according to Refinitiv estimates.
• YouTube advertizing revenue: $7.42 billion, according to StreetAccount estimates.
• Google Cloud revenue: $6.69 billion, according to StreetAccount estimates
• Traffic acquisition costs (TAC): $12.38 billion, according to StreetAccount estimates

As fears of a recession intensify, companies are taking a much cautious approach with their advertizing budgets. For Google genitor Alphabet, which is mostly babelike connected integer ads, that's led to reduced maturation estimates.

The institution is expected to study gross maturation of astir 8% for the 3rd quarter. Aside from 1 play astatine the commencement of the Covid pandemic, that would people the weakest enlargement for immoderate 4th since 2013. The slowdown is peculiarly acute astatine YouTube, which is expected to spot maturation of astir 3%, according to StreetAccount. YouTube is seeing heightened contention from short-video app TikTok.

During the quarter, CEO Sundar Pichai enacted immoderate cost-cutting measures crossed the company, citing economical challenges, including a imaginable recession, soaring inflation, rising involvement rates and tempered advertisement spending. In September, Pichai said helium wanted to marque the institution 20% much efficient, and that could see slashing jobs and merchandise cuts.

Google recently canceled the adjacent procreation of its Pixelbook laptop and cut funding to its Area 120 in-house incubator. And past month, Google said it would beryllium shuttering its integer gaming work Stadia. Also during the quarter, the institution said it would beryllium delaying plans to regenerate third-party cookies for advertizing until 2024 aft uncovering the modulation much challenging.

In a heated all-hands meeting, staffers confronted executives connected the planned cuts to question and amusement budgets. Pichai responded by reminding employees that determination was a clip erstwhile Google was "small and scrappy" and that they "shouldn’t ever equate amusive with money." 

Getting workers backmost to the bureau continues to beryllium a situation for Google, aft employees became accustomed to flexibility during the pandemic, erstwhile profits boomed to a record. Adding to the tension, employees told CNBC during the 4th that they person regular notifications from absorption of Covid-19 infections, causing immoderate to question the company’s return-to-office mandates.

Alphabet shares person dropped 29% this twelvemonth arsenic of Monday's close, performing astir successful enactment with the Nasdaq.

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