Google parent Alphabet posted a $3.02 billion loss at the end of 2017 after a $9.9 billion charge to cover initial costs of the GOP’s tax overhaul.
The tech giant, known for its ubiquitous search engine, joins S&P 500 stalwarts from Citigroup to General Electric that have posted quarterly losses because of provisions in a law designed to drive U.S. economic growth by cutting the top corporate rate to 21 percent from 35 percent.
Executives at most companies have nonetheless been optimistic about the long-term effects of the bill, with many predicting lower tax payments this year and some pledging billions of dollars to new equipment or awarding bonuses to workers.
Despite the one-time charge’s effect on Alphabet’s bottom line, its revenue continued to increase, climbing 24 percent in the three months through December to $32.3 billion.
“Our business is driving great growth,” CFO Ruth Porat, who previously held the same post at investment bank Morgan Stanley. “Our full-year operating income growth continues to underscore our core strength, and on top of this, we continue to make substantial investments for the long-term in exciting new businesses.”
Excluding the tax charge, the Mountain View, Calif.-based company’s profit of $9.70 a share trailed the $9.98 average estimate from analysts surveyed by FactSet.
While the tax bill passed in December is broadly beneficial for U.S. businesses, it also contained costly elements, such as a levy of 15.5 percent on cash held overseas and 8 percent on other assets.
The reduction in the top corporate rate, meanwhile, forced some firms to mark down the value of tax breaks related to operating losses in previous years.
