Alphabet Generates $26 Billion Revenue in Q4, Google CEO Calls Hardware Sales Promising

Using a tablet

corporate parent didn't quite meet analyst expectations for its fiscal fourth quarter of 2017, leading investors to send the stock down as much as 6% in after-hours trading.

Google CEO Sundar Pichai didn't provide any concrete sales numbers for his company's new Pixel phones and other recently-introduced hardware devices during Thursday's earnings call of Google parent Alphabet , only telling analysts that "the early signs are promising."

That left analysts no other choice than to read the tea leaves, and scour Alphabet's earnings numbers for any indication on whether the Pixel phone is a success or not.

Alphabet booked revenue of $26 billion during the three months ending December 31 2016, compared to $21.3 billion during the same time last year. The company's adjusted net income for Q4 of 2016 was $5.3 billion, compared to $4.9 billion a year ago. This equals earning per share of $9.36, compared to $8.67 a year ago.

Analysts had expected earnings of $9.64 per share after the company delivered a massive beat with its Q3 2016 results . That slight miss sent Alphabet's stock down in after-hours trading.

Google's ad business is still the biggest money-maker for Alphabet - but this time around, analysts and industry observers paid especially close attention to a different source of revenue: Google generated $3.4 billion with its "other segments" of business, which include not only Play Store and services revenues, but also sales of hardware like the recently-introduced Pixel Phone.

Google unveiled the Pixel phone as a contender to Apple's iPhone last fall, but has said little about the device's performance since. Pixel phones are currently only available through Verizon, as well as via Google's own web store. Recent reports indicated that both had trouble keeping up with demand for some of the phone's models.

Google also introduced a range of other hardware devices in recent months, including its own line of Wifi routers, an Amazon Echo competitor called Google Home and its first VR headset.

With lower retail prices, these devices likely didn't have as much of an impact on Google's overall hardware revenue, but Pichai still suggested that Google will continue to expand its hardware lineup. He didn't provide many details on initial usage patterns, but said that the company saw a lot of usage during the holidays. "In particular, Google Home was a very popular present," he said.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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