Alphabet Shares Fall More Than 7% as Free Cash Flow Turns Negative Again

Alphabet shares fell more than 7% in after-hours trading Wednesday as Google’s parent recorded negative free cash flow for a second straight quarter, with capital outlays exceeding cash generated from operations.

The cash flow measure was negative $9.07 billion in the third quarter. Alphabet generated $42.29 billion from operating activities and spent $51.36 billion on capital expenditures, up from $23.95 billion in the year-earlier period. Free cash flow in the second quarter was negative $5.86 billion.

Total revenue climbed 25% to $127.58 billion, while Google Cloud revenue rose 103% to $30.71 billion. Google Cloud operating income increased to $11.12 billion from $3.59 billion a year earlier.

Net income also reflected an $8.7 billion net loss on equity investments. The loss reduced net income by $6.7 billion and earnings per share by 55 cents; earnings per share came in at $2.12, down from $2.87 a year earlier.