Alphabet earnings hit by higher taxes, revenue soars

Google parent company Alphabet missed analysts' estimates on its earnings report on Thursday after being hit with higher taxes during the final quarter of 2016.

Alphabet saw sales rise however as executives praised the company's ability to diversify its revenue streams, following years of reliance on advertising.

Non-advertising revenue climbed 62% for the quarter year-on-year to $3.4bn, although Google still takes in most of its revenue through advertisers.

The company posted fourth quarter earnings per share of $9.36 on an adjusted basis, with total revenues of $26.06bn.

Analysts had on average expected earnings per share of $9.64 on $25.26bn in revenue.

Tax charges related to stock-based compensation reported by the company were up to $586m, almost $300m higher than the same period of 2015.

Google is experiencing strong sales on much of its new hardware items such as Google Home, and its new smartphone Pixel.

"We see tremendous potential ahead for these businesses, as well as in the continued development of non-advertising revenue streams for YouTube," said chief financial officer Ruth Porat.

Alphabet's results were not welcomed by investors, with shares dropping 2.2% in after-hours trade.