Google parent Alphabet said it would buy back $70 billion worth of shares and increase its dividend by 5% as it reported first-quarter earnings above Wall Street expectations on Thursday.
Shares jumped 4% in extended trading, adding about $75 billion to the company’s market value.
Alphabet beat quarterly revenue estimates, benefiting from steady growth in its digital advertising business, which helped offset muted growth at its cloud computing unit.
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U.S. President Donald Trump’s trade policy has triggered worries of an economic downturn, prompting companies to rethink their spending on advertising. But analysts say the digital ad market still held its ground in the first quarter.
Revenue from Google’s mainstay ad business, which makes up about 75% of its overall revenue, rose 8.5% to $66.89 billion in the quarter — a slowdown from the prior quarter’s 10.6% increase, but still above analysts’ expectations for a rise of 7.7%.
Google Cloud reported a 28% rise in revenue to $12.26 billion, slowing from the 30.1% growth reported in the previous quarter. Analysts were expecting the unit to report revenue of $12.27 billion, according to LSEG’s data compilation.
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The company reported total revenue of $90.23 billion for the first quarter, compared to analysts’ average estimate of $89.12 billion, according to data compiled by LSEG.
First-quarter net income was $34.54 billion, surpassing Wall Street expectations of $24.85 billion.