Daily Tech Snippet: Friday, January 27

• Alphabet posts strong revenue growth, higher taxes hit earnings: Google parent Alphabet Inc posted fourth-quarter profit below analysts' estimates on Thursday, hurt by a higher tax rate, but analysts cheered the company's progress in diversifying its business beyond advertising. While advertising still accounts for the lion's share of Google's revenue, rising 17.4 percent to $22.4 billion in the quarter, Alphabet Chief Financial Officer Ruth Porat underscored that the company is broadening its business - pointing to growth in hardware, app sales and the cloud business. The company's other revenue, which captures such businesses, climbed 62 percent to $3.4 billion.The results were met with a mixed reaction from Wall Street, which sent shares down 2.2 percent to $838 in extended trade after closing at $856.98 on Nasdaq. Google faced a higher tax rate of 22 percent, compared to 19 percent for the year overall, contributing to the dent in profitability. The company's consolidated revenue rose to $26.06 billion above the average estimate of $25.26 billion.

• Microsoft profit up as demand for cloud service soars: Microsoft Corp reported a 3.6 percent rise in fiscal second-quarter profit on Thursday, helped by growth in its fast-growing cloud computing business, but it saw a slight decline in margins in the unit that includes its flagship cloud platform Azure. Shares of the world's biggest software company were up about 1.1 percent in after-hours trading. Microsoft Corp reported a 3.6 percent rise in fiscal second-quarter profit on Thursday, helped by growth in its fast-growing cloud computing business, but it saw a slight decline in margins in the unit that includes its flagship cloud platform Azure. Sales in Microsoft's personal computing business, which includes its Windows software, once the bedrock of the company, fell 5.0 percent to $11.8 billion, slightly beating the rate at which personal computer sales fell in the quarter. Along with his push into cloud and mobile, Nadella also orchestrated Microsoft's biggest acquisition, the $26.2 billion deal for LinkedIn, which closed last month. LinkedIn contributed $228 million of revenue in the quarter, Microsoft said, but reported a net loss of $100 million, or one cent per share. The company's net income rose to $5.20 billion and adjusted revenue, excluding LinkedIn, was $25.838 billion, ahead of analysts' average estimate of $25.298 billion. Microsoft's shares had risen 23.2 percent in the past 12 months, compared with the 20.7 percent gain in the broader S&P 500 index.

• Data center growth drives Intel's fourth-quarter revenue, profit beat: Intel Corp reported better-than-expected quarterly revenue and profit driven by a stabilizing PC market and growth in its data center business, which offers cloud-based software services. Revenue from the data center business rose 8.4 percent to $4.67 billion in the fourth quarter, while revenue from its traditional PC business rose 4.3 percent to $9.13 billion. The Santa Clara, California-based company's net revenue rose 9.8 percent to $16.37 billion, beating the average analysts' estimate of $15.75 billion. However, the company said its net income fell to $3.56 billion.

• PayPal outlook muted on mobile competition, currency trends: PayPal Holdings Inc (PYPL.O) offered a subdued outlook on Thursday, as it faced unpredictable currency fluctuations and an increasingly competitive digital payments market. The payments processor predicted its first-quarter revenue would be roughly in line with analyst expectations, with flat to slightly better operating margins for the full year. PayPal gave the guidance in reporting a 17 percent rise in fourth-quarter revenue that mirrored Wall Street expectations. Chief Financial Officer John Rainey said fourth-quarter results were hurt by currency movements, and he expected those pressures to continue throughout the year. Paypal stock fell 2.4 percent in after hours trading to $40.49.Schulman said growth in mobile payments and new customer accounts helped boost fourth-quarter revenue to $3 billion, up 17 percent compared with a year earlier, the same as what analysts polled by Thomson Reuters I/B/E/S had expected. Net income rose to $390 million, or 32 cents per share, from $367 million, or 30 cents per share, a year earlier. On an adjusted basis, the company earned 42 cents per share.