The daily business briefing: January 27, 2017

1. Google revenue rises on mobile ad growth

Google parent Alphabet on Thursday reported fourth-quarter revenue that beat analysts' expectations. The company's revenue rose by 22 percent to $26.06 billion, with net income rising to $5.33 billion from $4.92 billion a year earlier. Still, the company's 8.3 percent increase in profit fell short of predictions, and the company's stock dropped by 2.3 percent in after-hours trading. Google continued to put to rest old fears that the shift to mobile devices would weaken its search dominance, as its ad growth was fueled by mobile search. The company got 96 percent of all search-ad clicks last quarter, while its share of the desktop search market was 78 percent.

The New York Times The Wall Street Journal

2. Mexico's president cancels meeting with Trump over border wall

Mexican President Enrique Peña Nieto said Thursday that he was canceling his scheduled meeting with President Trump in Washington next week. He was under intense pressure to snub Trump for signing an executive order to start building a wall on the U.S.-Mexico border. Peña Nieto also rejected Trump's call for Mexico to foot the bill for the wall, which is estimated to cost around $14 billion, give or take a few billion. Trump said the decision to cancel the meeting was mutual, and that a 20 percent tax on Mexican imports was one way to deliver on his promise to make Mexico pay for the wall. The spat increased the danger of a trade war between the Trump administration and Mexico, one of America's biggest trading partners.

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The New York Times

3. British prime minister calls for trade deal ahead of Trump meeting

British Prime Minister Theresa May plans to pitch a free-trade deal to President Trump when she visits the White House on Friday. "I am delighted that the new administration has made a trade agreement between our countries one of its earliest priorities," May said in a speech Thursday at a Republican Party retreat in Philadelphia. She said a deal could demonstrate to frustrated working class voters that backed both her and Trump that "free markets, free economies, and free trade can deliver the brighter future they need." At the same gathering, Trump said the U.S. should be more assertive in forging trade terms, favoring "one-on-one deals" rather than multilateral trade agreements like the Trans-Pacific Partnership, which he has scrapped.

Bloomberg

4. Toshiba to spin-off microchip business

Toshiba, desperate for cash after bad investments in nuclear power that touched off an accounting scandal, said Friday that it would spin-off its microchip business. The Tokyo-based conglomerate reportedly plans to sell less than a 20 percent stake in the highly profitable flash memory operation to keep its net worth positive despite the several billions of dollars it is expected to book due to the nuclear losses. "We will do whatever it takes, including increasing capital," Toshiba Chief Executive Satoshi Tsunakawa said. "I really feel responsible."

The Associated Press

5. Cloud business growth fuels Microsoft profit gains

Microsoft on Thursday reported that its profit rose by 3.6 percent in the last quarter, fueled by growth in its cloud computing business. Gross margins in the unit that includes Microsoft's flagship Azure cloud platform edged down to 48 percent from 49 percent the previous quarter, but that was still up from 46 percent a year ago. The figure is a closely watched indicator of actual profit from the cloud products. Shares of Microsoft, the world's largest software maker, rose by 1.1 percent in after-hours trading.

Reuters