COMPANY NEWS IN BRIEF

  • 1 Month Ago
Alphabet falls as expenses overshadow quarterly results beat



Alphabet's shares fell more than 3% in premarket trading on Wednesday after the Google-parent flagged higher expenses due to competition heating up in search and cloud computing.

The company reported capital expenditures of $13 billion in the second quarter ending June. Ruth Porat, in her last conference call as Alphabet's chief financial officer, told investors that quarterly capital expenditures for the rest of 2024 would be at or above $12 billion.



In the January-March period, Alphabet's capital expenditure had jumped 91% to $12 billion, spooking investors.

"Alphabet is in the process of durably reengineering its cost base, with a focus on moderating expense growth and reallocating resources towards key AI initiatives," Wedbush analyst Daniel Ives said.

Advertising sales, the company's chief revenue source, rose 11% to $64.6 billion in the second quarter, fueled by events such as the Paris Olympics and elections in multiple countries, including the United States.



However, revenue from YouTube increased 13% to $8.67 billion, but fell short of Wall Street estimates.

"The ongoing growth in CTV (connected TVs that can access the internet) and long-form digital video ad inventory may be impacting growth at YouTube ... we expect the trajectory of the segment will be an area of debate in the coming quarters," Wedbush analysts said.

On the artificial intelligence front, Google expanded AI-powered summaries in Search and enhanced its Gemini AI model to better compete with rivals such as OpenAI and Microsoft.

-REUTERS-



Otis cuts annual sales view on slowdown in construction activity in China, US



Elevator maker Otis Worldwide lowered its 2024 net sales forecast on Wednesday on softening demand for its new equipment from North America and China.

The company expects its full-year net sales to be between $14.3 billion and $14.5 billion, down from its previous forecast of $14.5 billion to $14.8 billion.

Sales growth in the United States decreased as inflationary pressures slowed construction activity, while a slow recovery in China's property market hurt the company's new equipment segment that makes and installs elevators, escalators and moving walkways.



Quarterly net sales for the company's new equipment fell 11.4% to $1.42 billion from a year ago.

However, net sales for its mainstay services segment, which carries out maintenance, repairs and product upgrades, rose 3% to $2.18 billion, on steady demand.

Otis' total net sales slipped 3.2% to $3.6 billion in the second quarter, missing analysts' average estimate of $3.73 billion, according to LSEG data.

The company also raised the lower limit for its annual adjusted profit to between $3.85 and $3.90 per share, compared with the earlier range of $3.83 to $3.90.

It reported an adjusted profit of $1.06 per share in the quarter ended June 30, slightly above expectation of $1.03.

-REUTERS-



Facebook removes 63,000 accounts in Nigeria over 'sextortion' scams



Meta Platforms said on Wednesday it had removed about 63,000 Facebook accounts in Nigeria that attempted to engage in financial sexual extortion scams mostly aimed at adult men in the United States.

Nigerian online fraudsters, known as "Yahoo boys", are notorious for scams that range from passing themselves off as people in financial need or Nigerian princes offering an outstanding return on an investment.



Meta said in a statement the removed accounts also included a smaller coordinated network of around 2,500 that were linked to a group of around 20 individuals.

"They targeted primarily adult men in the U.S. and used fake accounts to mask their identities," Meta said.

In sexual extortion, or "sextortion", people are threatened with the release of compromising photos, either real or faked, if they do not pay to stop them.



The investigation showed that the majority of the scammers' attempts were unsuccessful and although mostly targeting adults, there were also attempts against minors, which Meta reported to the National Centre for Missing and Exploited Children in the U.S.

The company said it had used a combination of new technical signals developed to help identify sex extortion.

Nigeria's scammers became known as "419 scams" after the section of the national penal code that dealt - ineffectively - with fraud.



As economic hardships worsen in the country of more than 200 million people, online scams have grown, with those behind them operating from university dormitories, shanty suburbs or affluent neighbourhoods.

Meta said some accounts were providing tips for conducting scams.

"Their efforts included offering to sell scripts and guides to use when scamming people, and sharing links to collections of photos to use when populating fake accounts," it said.

-REUTERS-