FirstFT: Alphabet beats earnings forecast and announces first-ever dividend

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Good morning. We start today with the latest Big Tech results as earnings season continues.

Alphabet’s first-quarter revenue jumped 15 per cent, buoyed by a rise in earnings across its main business lines, and the company announced its first-ever dividend of 20 cents a share alongside a $70bn stock buyback.

Revenue at Google’s parent company rose to $80.5bn, beating analysts’ expectations of $79bn, according to a filing yesterday. Earnings per share reached $1.89, up from $1.17 last year and exceeding the average $1.53 estimate.

Shares rose as much as 11 per cent in pre-market trading, positioning Alphabet to add more than $200bn to its market capitalisation and push it above $2tn, where it would join “Magnificent Seven” peers Microsoft, Apple and Nvidia.

Alphabet chief executive Sundar Pichai said the quarter represented a “strong performance from Search, YouTube and Cloud” and that Google was “well under way with our Gemini era”, referring to its generative artificial intelligence large language model. Here’s more from the tech giant’s results yesterday.

• Microsoft: AI helped boost the company’s cloud sales past analysts’ forecasts, lifting the shares in after-hours trading.

• Elon Musk’s xAI: Sequoia Capital, Silicon Valley’s best-known venture capital firm, has committed to investing in the billionaire’s AI start-up.

• Meta: The midweek whiplash for the social media company’s shareholders speaks volumes about how fast the focus of competition has shifted in the tech world, writes Richard Waters.

Here’s what else I’m keeping tabs on today and over the weekend:

• US-China relations: US secretary of state Antony Blinken will meet China’s President Xi Jinping later today. Tensions between the superpowers are growing over China’s support for Russia in its war against Ukraine and over trade policy. Follow coverage of the meeting here.

• Economic data: The Federal Reserve’s preferred measure of inflation is updated today. The annual measure of the core personal consumption expenditures price index ticked lower in March compared with February. The University of Michigan also updates its consumer sentiment index.

• Companies: Oil majors Chevron and ExxonMobil release earnings covering the first three months of the year. AbbVie, Colgate-Palmolive, Phillips 66, T Rowe Price and Newell Brands also report results. 

• G7: Ministers in the grouping meet in Turin on Sunday to discuss action on the ongoing climate, energy and environment crisis.

• Japan election: Voters go to the polls on Sunday in three by-elections for seats in the lower chamber of the Diet, the country’s parliament.

Join us to listen to Nancy Pelosi, Jake Sullivan and Bradley Whitford at this year’s FT Weekend Festival in Washington DC. As well as debates and interviews, come along for tastings, performances and the chance to meet and talk to our writers and columnists. Click here to find out more and register.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Anglo American has rejected an unsolicited £31bn offer from larger rival BHP, saying the proposal “significantly undervalues” the company and would be “highly unattractive” to its shareholders. BHP’s proposal is intended to boost its position as the world’s biggest copper and steelmaking coal supplier that would lead to a break-up of UK-listed Anglo. The rebuttal by Anglo raises the prospect of a bitter and hostile takeover battle. Here’s the other companies that would be interested in making a bid.

2. US private equity firm Thoma Bravo has agreed to take UK cyber security company Darktrace private in a transaction valuing the company at $5bn. The agreement comes after the two parties held discussions about taking the company private in the summer of 2022. If the deal goes through, it would mark the latest high-profile take-private of a UK-listed company by an overseas private equity group. Shares in Darktrace, which floated in April 2021, surged.

3. The yen fell to a new 34-year low early today after the Bank of Japan stuck to its dovish tone, holding interest rates near zero despite rising pressure on the central bank to tighten its policy and prop up the ailing currency. BoJ governor Kazuo Ueda struck a more dovish tone than currency traders had expected, saying there was “no major impact” from the weaker yen on underlying inflation for now. Read more on the governor’s press conference.

4. Investors have scaled back bets on US rate cuts before the presidential election, dealing a blow to President Joe Biden’s hopes of lower borrowing costs before he is set to face Donald Trump. According to futures contracts, investors are no longer fully confident that the Federal Reserve will deliver its first quarter-point reduction by September and instead expect such a move immediately after the November 5 election. Here’s why.

• European rates: The European Central Bank is likely to need extra rate cuts if global borrowing costs are pushed up by the Fed maintaining its restrictive monetary policy stance, the head of Italy’s central bank has said.

5. A US ban on non-compete agreements has left Wall Street businesses rushing to restructure contracts and find new ways to tie down the high-priced personnel that their business models rely on. The Federal Trade Commission voted on Tuesday to invalidate existing contracts for most employees and for all new contracts starting in August. Here’s how employers and industry groups have reacted.

The Big Read

Rahile Dawut’s life was devoted to the preservation of cultural diversity across the vast Xinjiang region, which covers about one-sixth of modern China. An anthropologist, she insisted on conducting gruelling fieldwork, regularly travelling hundreds of kilometres from the capital Ürümqi to isolated villages to document the at-risk culture of the local Mazar. Then, in December 2017, Rahile disappeared. In 2018 she was tried in secret by the Chinese state. Her case has become emblematic of the Chinese government’s crackdown on the Uyghur people and its obliteration of Islamic culture. Edward White tells the story of a remarkable life — and the fight for Dawut’s freedom.

We’re also reading . . . 

Chart of the day

When it comes to immigration, almost everything looks better in anglophone countries. Immigrants and their offspring in the UK, US and so on tend to be more skilled, have better jobs and often out-earn the native-born, while those in continental Europe fare worse, writes our chief data reporter John Burn-Murdoch.

Take a break from the news

Here are our six films to watch this week — including Challengers, a lusty new date movie that’s “such fun you suspect it must be illegal”, our film critic Danny Leigh writes.

Additional contributions from Tee Zhuo and Benjamin Wilhelm