- Tax Rate: Compared to a year earlier, Alphabet's tax rate doubled from 9% to 18%. When we are talking about a company with revenue of $40 billion-plus in the quarter, along with $7 billion to $10 billion in taxable income, that's a major impact. And, it has nothing to do with how well the business is performing.
- Headcount: The company saw a significant increase in headcount, pushing selling, general and administrative expenses. The 21% increase in employee count kept pace with the 22% revenue growth (ex-foreign exchange). Again, not a concern.
- "Other Bets": Last year, Alphabet posted income of $1.458 billion from "Other Bets." This year? An operating loss of $550 million. The difference between those two numbers is the difference between an EPS of $10.12 rather than $13.13, and that's with the higher tax rate. The $550 million loss alone hit the company for 75 cents per share.
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