The negative results have reinforced worries that inflation will continue to weigh on ad spend.
Google parent Alphabet Inc missed Wall Street estimates for quarterly revenue as advertisers cut spending amid an economic downturn.
Tuesday’s negative results reinforced worries on Wall Street that inflation will continue to weigh on ad spending. Last week, Smaller competitor Snap Inc has slowest revenue growth ever blasted inflation fears through the tech sector and temporarily wiped $40 billion off market capitalization.
Shares of Alphabet fell 5.8% in trading after the bell.
Alphabet’s weak results cause concern for other companies in the field, especially ad-dependent Meta Platforms. Facebook’s parent company, which reported results on Wednesday, saw shares fall 3.3% on Tuesday.
Google’s ad revenue was $54.48 billion in the third quarter, compared with $53.13 billion last year but below analyst expectations.
“We are working to realign resources to advance our highest growth priorities,” said Ruth Porat, Alphabet’s chief financial officer.
The company said total revenue was $69.09 billion for the quarter ended September 30, compared with $65.12 billion a year earlier.
Analysts expected average revenue of $70.58 billion, according to Refinitiv data.
“The missed Google earnings this quarter proves it’s not immune to the challenges facing the digital advertising industry,” said Jesse Cohen, senior analyst at Investing.com.
Alphabet’s net income fell to $13.91 billion, or $1.06 per share, from $18.94 billion, or $1.40 per share, a year earlier.
In July, the tech giant said it would slow its hiring pace for the rest of the year, saying it was “not immune to economic obstacles”.