Insight Into Couple of Market Players on Friday

Due to the revival of online ads in the third quarter, Alphabet (up 3.8 percent), Google’s parent company, posted much stronger expectations for results. The quarterly revenue of the company totaled $46.2 billion (up 14 percent year-on-year), well above the consensus predicted $42.9 billion. Buoyed by the coronavirus crisis, Alphabet, Inc. (GOOG) has experienced its first quarterly decline in sales, weighing on its stock price, since its IPO in 2004.

Alphabet’s revenues, as with other internet groups, including Snap and Pinterest, were helped by a strong recovery in online ads, both on the Google search engine and on YouTube, said Ruth Porat, the group’s chief financial officer. The Cloud and Play business sales also supported growth. Advertising sales from Google soared 10 percent to $37.1 billion from $33.8 billion a year ago, returning to growth after declining as a result of the coronavirus epidemic in the previous two years. Advertising revenue from YouTube rose by 32 percent from $3.8 billion a year ago to more than $5 billion ($5.04 billion), and cloud revenue rose 44 percent up to 3.44 billion from $2.38 billion in 2019.

ExxonMobil (XOM) was down -1% on Friday for its third consecutive quarterly loss. In the third quarter, the company experienced a deficit of $680 million, or 15 cents per security, largely because of a decrease in demand for black gold. The loss per share was 18 cents on an adjusted basis compared to a deficit of 25 cents forecast by the market. Compared to $65.05 billion a year, sales reached $46.2 billion in the reported quarter.

Yesterday, as part of its cost-cutting efforts, the U.S. oil giant announced plans to reduce its U.S. workforce by around 1,900, although the total reduction could hit 15% of the teams, or 14,000 jobs. It is evaluating its North American natural gas reserves, which could lead to write-downs of $25 billion to $30 billion if management changes its long-term growth plans.

The Organization aims to meet its 2020 capital and cash expenditure reduction goals and expects further decreases in 2021. Management announced the distribution of a quarterly dividend of $0.87 per share, considering its immense debt and continuing cost reductions. While this is very good news for shareholders, the group has not raised its dividend for the first time since 1982.

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