Alphabet Shares Fall More Than 6% After Quarterly Earnings Miss

Alphabet shares fell more than 6% in after-hours trading after the company missed third-quarter revenue and earnings expectations, despite stronger-than-expected Google Cloud growth and a sharp cash outflow.

Alphabet reported third-quarter revenue of $127.6 billion and net income of $26.2 billion. Earnings per share was $2.12, below market expectations. Its free cash flow was negative $9.07 billion, compared with analyst expectations for an outflow of about $36 million. That result marked a record cash drain.

Google Cloud revenue more than doubled year over year, rising 103% to $30.7 billion. That topped expectations of $29.6 billion and made the cloud unit a bright spot in an otherwise weaker quarter. The cloud performance contrasted with Alphabet's company-wide revenue and earnings misses.

The after-hours move followed the earnings release, with shares dropping even though the cloud unit beat its estimate. Alphabet's results showed a company-wide revenue and profit miss alongside above-estimate cloud growth and a record quarterly cash outflow.