Google parent Alphabet Inc. reported first-quarter results that exceeded analysts’ estimates, demonstrating that its search advertising business is so far weathering the economic downturn and increased competitive threats.

Sales, excluding partner payouts, were US$58.07 billion in the quarter, the company said Tuesday in a statement. That topped analysts’ projections for US$56.98 billion. Shares rose.

Google continues to fare better than its rivals as economic pressures force advertisers to reduce their spending. Search advertising has been generally more immune to swings in the economy than spending on social media, where competitors such as Facebook parent Meta Platforms Inc. and Snap Inc. have seen more dramatic declines in demand.

The company’s closely watched cloud unit also made money for the first time, reporting profit of US$191 million. Alphabet said in a note to investors ahead of the results that it had shifted the reporting of some costs from Google Cloud to Google Services.

“We are pleased with our business performance in the first quarter, with search performing well and momentum in Cloud,” Chief Executive Officer Sundar Pichai said in a statement. The company also authorized share buybacks of up to US$70 billion.

Alphabet leadership has been waging a cost-cutting drive to preserve the company’s profit margins as advertisers trim their budgets. Net income was US$15 billion, or US$1.17 per share, compared with Wall Street’s US$1.09-per-share estimate.

Investors have also expressed concern that Google’s long-dominant search advertising business may be newly vulnerable as conversational AI products such as OpenAI’s ChatGPT, which is being showcased by Microsoft Corp.’s Bing search, win more users. Yet the search advertising part of Google’s business grew at a healthy clip in the quarter, potentially allaying those concerns for now.

“Search performance will serve as an early indicator of Google’s ability to maintain its dominance in the area responsible for the majority of its revenue,” Evelyn Mitchell, a senior analyst with Insider Intelligence, wrote in a note.

Alphabet shares rose as much as 5.9 per cent after closing at US$103.85. The stock has gained 17.7 per cent so far this year.