Google parent Alphabet reports USD 3 bn loss on tax provision

 Google parent company Alphabet on Friday reported a quarterly loss of USD 3 billion as it set aside USD 11 billion for taxes on its overseas profits being brought back to the United States.

The California tech giant said revenues in the last three months of 2017 rose 24 per cent from a year ago to USD 32.3 billion and cited “great growth” for the company.

Shares in Alphabet slid 2.4 per cent to USD 1,139.05 in after-hours trade, amid concerns over profits below expectations.

Google remained the key driver of revenue and profit for the company, which has reorganized into new divisions for self-driving vehicles, life sciences and other so-called “moonshot” projects.

The Google segment accounted for USD 31.9 billion in revenue and delivered an operating profit of USD 8.8 billion.

Excluding the tax provision—following the lead of other multinationals taking advantage of a favorable rate to repatriate earnings—Alphabet would have posted a profit of USD 6.8 billion.

“Our business is driving great growth, with 2017 revenues of USD 110.9 billion, up 23 per cent year on year, and fourth quarter revenues of USD 32.3 billion, up 24 per cent year on year,” chief financial officer Ruth Porat said.

“Our full year operating income growth continues to underscore our core strength, and on top of this, we continue to make substantial investments for the long-term in exciting new businesses.”

Alphabet’s “other bets” category delivered revenue of USD 409 million, up from USD 262 million a year earlier. The loss from those projects narrowed to USD 916 million from USD 1.1 billion.