Alphabet Tops Apple As Most Valuable Company

In the stock market, as in the dictionary, Alphabet comes before Apple — perhaps not forever but for now.

As the investing world anticipated, shares of Google parent company Alphabet soared on the news that the company had bested expected results, with total revenues up 17 percent from the fourth quarter of 2014 and that rate growing to better than 19 percent once acquisitions costs are factored in. Overall, its top line of about $21.3 billion topped the Street at $20.8 billion, while EPS of $8.68 far outpaced the $8.08 that had been expected. The core business, or flagship, tied to online advertising was up 17 percent, a heartening sign as the company continues to invest money into its adjacent, but completely new, and as-yet-untested businesses.

Those untested businesses include Calico, Google Fiber, Google X and a whole range of investment vehicles.

Looking at the numbers tied to Google “proper:” Paid clicks were up 31 percent and, on Google’s sites, up even more than 40 percent. U.S. sales were up 24 percent, showing continued strength in that region and far outpacing the rest of the world, which grew by 12 percent. Mobile shopping, as could be expected, helped drive results. And, of course, YouTube gets traction via video ads, and management noted that as much as 80 percent of YouTube’s views can be traced to outside the U.S.

With a nod toward the new businesses, the entire year saw revenues of $448 million, with losses coming in at $3.5 billion, right in range of the analyst forecasts.

Google Play got a notable callout, with spending up 30 percent in the latest period, and as has been seen in recent periods, mobile has been outperforming desktop, with search the prime mover. The cost per click was down 16 percent from last year, with a 40 percent boost in site-wide paid clicks. And in a callout to the “billion plus” monthly users spanning Play and Android Maps, among others, Gmail now gets added to the list.

Android’s level of detail was limited to discussion about marketing relationships, such as New Balance.

Mobile, again, was pointed out by management as being particularly strong, with search gaining momentum, and Alphabet’s own research, said Google CEO Sundar Pichai, shows 30 percent of online purchases are done via mobile.