Alphabet shares plummet after it misses expectations

Jessica Morris
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Google Announces Quarterly Earnings
The firm separated out its core business from the "other bets" segment last year (Source: Getty)

Alphabet shares plummeted around seven per cent in after hours trading following a disappointing set of first quarter results.

Google's parent company reported revenue rose 17 per cent to $20.3bn year-on-year in the first three months of 2016, slightly below analysts' expectations for an increase to $20.4bn.

Earnings per share came in at $7.5 per share during this period, also disappointing analysts' who had pencilled in about $8 per share.

Read more: EU accuses Google of breaking antitrust rules with Android

Cost-per-click fell nine per cent year-on-year, while its paid clicks metric increased 29 per cent.

"Our first quarter results represent a tremendous start to the year with 17 per cent revenue growth year-on-year and 23 per cent growth on a constant currency basis. We're thoughtfully pursuing big bets and building exciting new technologies, in Google and our Other Bets, that position us well for long term growth," Ruth Porat, CFO of Alphabet, said.

These are the first set of results that Porat, former Morgan Stanley finance chief who joined nearly a year ago, would've had significant input into to budgeting process for.

The firm separated out its core business from the "other bets" segment last year.

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Other bets revenue increased to $166m year-on-year in the first quarter, from $80m in 2015. But its losses swelled to $802m during this period, from $633m.

It comes as Google has been slapped with its second anti-trust charge by the European Commission for using its Android operating system to squeeze out rivals.

Google has faced in both the EU and countries including India, Brazil and Russia. U.S. regulators closed their most recent investigation of the company in 2013 without taking action.