Investing.com - Google parent Alphabet (NASDAQ:GOOGL) reported fourth-quarter earnings that topped Wall Street expectations on the top and bottom lines Monday, but operating income growth was a concern and shares sold off after hours.
Alphabet shares lost 2.5% postmarket.
The company reported earnings earnings per share of $12.77 on revenue of $39.28 billion. Analysts polled by Investing.com anticipated EPS of $10.88 on revenue of $38.91 billion. That compared to EPS of $9.70 on revenue of $32.32 billion in the same period a year earlier. Revenue was up 20.5%.
But income from operations for the quarter rose just 7% to $8.203 billion from $7.664 billion a year ago. Analysts were looking for around $8.6 billion, according to Seeking Alpha.
Traffic acquisition costs rose to $7.44 billion, up 13% but right around what the market was expecting.
Partly because of the higher spending, Alphabet reported an operating margin of 21% in the fourth quarter, down from 24% a year ago.
Facebook (NASDAQ:FB) Inc's better-then-expected fourth-quarter results last week had lifted expectations for Alphabet as they suggested that concerns about a global economic slowdown may be overblown.
Alphabet had $31.07 billion in total fourth-quarter costs and expenses, up 26% from last year. Capital expenditures rose 64% compared to last year, up to $7.08 billion.
A run-up in spending has reflected Google's efforts to boost staffing on its cloud computing division, promote its consumer devices and YouTube subscription packages and acquire office buildings in Silicon Valley and New York.
Fourth-quarter earnings also benefited from a $1.3 billion unrealized gain related to a non-marketable debt, Alphabet said.
-- Reuters contributed to this report.