Alphabet overtakes Apple as world's most valuable company

Alphabet today reported better-than-expected quarterly profit, sending shares of Google's parent soaring in after-hours trading and making it the most valuable company globally ahead of rival Apple.

Google's shares were up almost 6 percent at US$795.68 in after-hours trading, after breaking through the US$800 level.

Alphabet's combined share classes were worth US$555 billion, compared with Apple, which had a value of about US$534 billion.

Alphabet will officially overtake Apple in market value if both companies' shares open at current levels on Tuesday US time.

This was the first quarter the company provided information on what it calls its 'Other Bets' business, such as self-driving cars, and the solid results eased investor concerns about the company's spending on ambitious projects.

"As long as the core business continues to operate well with accelerated revenue... investment in those businesses can continue," said Ronald Josey of JMP Securities.

Alphabet said consolidated revenue jumped 17.8 percent to US$21.3 billion in the fourth quarter, from US$18.1 billion a year earlier. Analysts had expected US$20.8 billion, according to Thomson Reuters I/B/E/S.

Adjusted earnings of US$8.67 per share handily beat analysts' average estimate of US$8.10 per share.

Total operating losses on the Other Bets – which include glucose-monitoring contact lenses and Internet balloons - increased to US$3.6 billion in the 12 months ended December 31, and US$1.2 billion in the fourth quarter.

In a call with analysts, CFO Ruth Porat attributed the strong earnings to "increased use of mobile search by consumers," as well as "ongoing momentum" in YouTube and programmatic advertising.

Net income in the fourth quarter rose to US$4.9 billion from US$4.7 billion.