[caption id="attachment_90676" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]   1Q19 Results Alphabet (the parent company of Google) reported 1Q19 revenues of $36.34 billion, up 16.7% year over year and below the $37.3 billion consensus estimate. Revenues increased 19% on a currency-neutral basis. Non-GAAP EPS was $11.90, down 10.8% year over year and beating the $10.60 consensus estimate. GAAP EPS was $9.50, with the difference arising from the fine levied by the European Commission (EC). On March 20, 2019, the EC declared that certain contractual provisions in agreements that Google had with AdSense for Search partners infringed European competition law and levied a €1.5 billion ($1.7 billion) fine. Management commented that growth in the quarter was led by mobile search, YouTube and Cloud. Details from the Quarter Google Segment

• Google properties revenues were $25.7 billion, amounting to 71.0% of total revenues, up 16.7% year over year. Results continued to be led by mobile search, with strong contributions from YouTube and desktop search.
• Google Network Members' property revenues were $5.0 billion, amounting to 13.9% of total revenues, up 8.5% year over year, reflecting growth from AdMob, followed by Google Ad Manager.
• Google other revenues were $5.4 billion, amounting to 15.1% of total revenues, up 25.1% year over year, fueled by Cloud and Play and partially offset by hardware.

Paid clicks on Google properties increased 39% year over year, and impressions on Google Network Members increased 1%. The cost-per-click on Google properties declined 19% year over year, and the cost-per-impression on the Google Network increased 1%. Traffic acquisition costs (TAC) for Google Network Members was $3.5 billion, up 2.7% year over year and amounting to 69% of Google Network Members’ revenue (down from 73% in the year-ago quarter), due to a favorable product mix shift. The TAC to distribution partners was $3.4 billion, up 16.6% year over year and amounting to 13% of Google property revenue (flat year over year.) Total TAC were $6.9 billion, up 9.1% year over year and amounting to 22% of Google advertising revenue, reflecting a favorable mix shift from network to sites and a decrease in the network TAC rate. Google operating income was $9.3 billion, up 11.4% and representing a 25.8% margin, down from 27.0% in the year-ago quarter. Other Bets Segment Google’s Other Bets segment includes Access, Calico, CapitalG, GV, Verily, Waymo, X and others. Revenues were $170 million, up 13.3% year over year, driven by Fiber and Verily. The segment generated an operating loss of $868 million, compared to $571 million a year ago. Recent accomplishments include:

• Waymo’s announcement of an expansion of its activities in Michigan, the first factory dedicated to the production of L4 autonomous vehicles.
• Loon announced a long-term strategic relationship to advance the use of high-altitude vehicles with HAPSMobile, which will invest $125 million.
• Wing became the first drone delivery company to receive certification from the FAA.

Other Details:

• Google Cloud Platform remains one of the fastest growing businesses in Alphabet, with strong customer momentum due to demand for compute and data analytics products.
• Strong growth in Play was driven particularly by performance in Asia Pacific.
• Hardware results reflect lower year-on-year sales of Pixel, reflecting in part heavy promotional activity given the recent pressures in the premium smartphone market.

Outlook The company did not offer guidance; however, it commented that it remains focused on, and excited by, significant growth opportunities across its businesses. There was a significant swing year-over-year in the impact of currency movements on results in the quarter from a big tailwind in the first quarter of 2018 to a headwind in 2019, which affected revenues and operating income, since the majority of the company’s expenses are in the US. Based on the continued strengthening of the US dollar relative to key currencies, management expects a continued headwind to revenues and operating income in the second quarter. Regarding Sites revenues, the timing of product changes in ads can have an impact on year-on-year growth rates, and Alphabet management will continue to make changes for the long-term interest of users and advertisers. The Google Cloud Platform continues to have positive momentum, with balanced growth among new customers and expansion with existing customers. While first-quarter Hardware results reflected pressures in the premium smartphone industry, momentum for assistant-enabled Home devices, particularly the Home Hub and Mini devices, remains positive. The company plans to announce several new hardware devices at the Google I/O 2019 conference on May 7. Consensus estimates call for FY19 revenues of $160.5 billion (up 17.3%) and EPS of $46.48 (up 6.4%).