GOOGLE'S AD SALES GROWTH ACCELERATED IN 3Q, BUT INVESTORS ARE SONIN UNIMPRESSED WITH THE PERFORMANCE

Google’s digital advertising sales growth accelerated during the summer, advancing a recent revival that helped its corporate parent Alphabet Inc. to deliver a quarterly profit that exceeded analysts’ projections.

The third-quarter results released Tuesday for the July-September period included a 9% increase in Google’s ad sales from the same time last year. Those gains were the main reason Alphabet’s total revenue rose 11% from a year ago to $76.69 billion. The upturn was even better than the 7% year-over-year increase in revenue that Alphabet produced in the April-June period when it reversed an unprecedented drop in Google’s ad revenue after nearly 20 years of growth.

The higher revenue — coupled with cost cuts that have trimmed more than 7,800 employees from Alphabet’s payroll so far this year — enabled the Mountain View, California, company to post a profit of $19.7 billion, or $1.55 per share, a 42% increase from last year. Alphabet ended September with nearly 182,400 employees.

Despite the signs of progress in many areas, revenue from Google’s Cloud division that helps powers websites — an area of robust growth — fell below analysts’ projections at at time when artificial-intelligence technology was expected to provide a bigger lift. Meanwhile, Microsoft was simultaneously reporting stronger results in its own cloud operations, stoking worries that Google may be losing ground in a battleground that is expected to become even more important as AI progresses.

In a conference call with analysts, Alphabet CEO Sundar Pichai said some customers were ''optimizing” their spending on cloud services — an indication that some businesses are tightening their budgets amid economic uncertainty caused by wars in the Middle East and Ukraine, as well as a potential shutdown of the U.S. government next month.