Alphabet Comes Before Apple as World’s Most Valuable Company

Alphabet now comes before Apple atop the list of the world's most valuable companies. The shift occurred in Monday's extended trading after Alphabet, Google's new parent company, released a fourth-quarter earnings report that highlighted the robust growth of the digital ad market. Apple Inc.'s iPhone, meanwhile, is suffering its first downturn since it debuted eight years ago.

Alphabet Inc. earned $4.9 billion on revenue of $21.3 billion in the fourth quarter. If not for employee stock expenses and certain other items, Alphabet said it would have earned $8.67 per share. That figure easily topped the average estimate of $8.10 per share among analysts surveyed by FactSet.

The report provided the most detailed breakdown yet on the profits pouring in from Google's dominant search engine and ad network. (Google reorganized itself under Alphabet last October.) Investors pushed up Alphabet stock $35.73, or 4.6 percent, to $806.50 in extended trading.

Based on that after-hours bump, Alphabet's market value stood at $555 billion while Apple's was at $533 billion, based on the most recent regulatory filings showing the company's outstanding shares. The rankings could quickly change again in regular trading Tuesday.

Apple's stock has been sliding amid concerns over slowing iPhone sales. Meanwhile, Alphabet's stock has surged by 45 percent since the end of 2014 when it was still trading under Google's name.

The fourth-quarter report marks the first time Alphabet has spelled out the costs of running still-experimental businesses that are trying to do everything from eliminating human drivers to curing cancer.

Until now, Google chose to hide the expense of running those peripheral operations in its financial statement. The company's opaque accounting made it difficult to know just how much profit Google reaped from its primary business -- selling digital ads next to everything from search results to YouTube videos.

In the fourth quarter, Google produced an operating...

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