Alphabet's quarterly profits fall after $5 billion European Union fine

Alphabet

Alphabet

Shares in Google parent Alphabet jumped in after-hours trading Monday as the company's second-quarter results exceeded Wall Street forecasts after taking into account a $5 billion U.S. charge levied by European regulators.

Operating income for the period was $7.9bn, up 15 per cent year on year, or $2.8bn if you subtract the $5bn (€4.3bn) fine for breaking European Union antitrust rules, down 32 per cent. Alphabet's operating margin was 24 per cent without the fine and 9 per cent with it, versus 26 per cent and 16 per cent a year ago, respectively.

Shares rocketed more than 4pc in after-hours trade, as the market welcomed the strong results, in what could be a sign investors tempered.

The company reported a profit of $3.2 billion for the three months that ended June 30. Analysts estimated $9.52 per share, according to research aggregated by Thomson Reuters.

Areas outside of Google's core ad business saw the strongest growth.

Net income came in at $US3.2 billion, down from $US3.5 billion in the same quarter of 2017, largely due to the European fine. Last year, I wrote that the company doesn't expect to be paying such fines on a regular basis, but that's proven to be wrong this year.

The report said the smartphone operating system runs on more than 85 percent of the smartphones. Google says it will appeal the decision.




Including the fine, Alphabet still booked net income of 3.2 billion, which equals earnings of $4.54 per share.

The monster quarter came despite a regulatory backlash in Europe, rising questions about Google's massive data collection and clashes with advertisers over inappropriate content on YouTube.

"I'm confident we find a way to make sure Android is available at scale to users everywhere", Mr. Pichai said during the call with analysts.

Traffic acquisition costs, a key metric in Google's ad business, went up to 23% of ad revenue in the second quarter.

Investors reacted by sending Alphabet shares up by as much as 5.2 per to $1,274.16 in after-hours trading in NY.

Other Bets, the home of Google's riskier, experimental businesses, lost $732 million in the quarter, versus a loss of $633 million in the same period a year earlier.

On the company's conference call, CFO Ruth Porat said, "One of the biggest opportunities for investment continues to be our ads business, where we're continuing to invest meaningfully". However we don't get to see the various segments of the business in these financials.

Recommended News

  • Demi Lovato Reportedly Hospitalized for Possible Overdose

    Demi Lovato Reportedly Hospitalized for Possible Overdose

    Her 2015 album, " Confident ", earned her a Grammy nomination for best pop vocal album. Reps for the singer did not immediately respond to a request for comment.
    Reports Of A Mass Shooting In Toronto

    Reports Of A Mass Shooting In Toronto

    Suddenly, she and the other customers were told to run to the back of the restaurant. Police were reportedly called to the scene around 10pm Sunday night.
    Gianfranco Zola returns to Chelsea as Maurizio Sarri's assistant

    Gianfranco Zola returns to Chelsea as Maurizio Sarri's assistant

    He added three tallies in UEFA Europa League play before making six appearances during France's 2018 run to the World Cup title. He has been linked with a move to European champion Real Madrid , which recently sold Cristiano Ronaldo to Juventus .
  • Trump Tells VFW Convention North Korea to Return US Remains Soon

    Trump Tells VFW Convention North Korea to Return US Remains Soon

    A satellite image released by 38 North on Monday showing the partial dismantling at the Sohae launch site in North Korea. He said the North's action was an important development and may lead to more activities at the area.
    Toronto Mayor Says City in Shock After Mass Shooting

    Toronto Mayor Says City in Shock After Mass Shooting

    The shooting happened on Danforth Avenue in the city's Greektown neighbourhood, an area filled with restaurants. Police Chief Mark Saunders earlier said he would not speculate on a motive but did not rule out terrorism.
    TIME cover morphs Donald Trump into Vladimir Putin

    TIME cover morphs Donald Trump into Vladimir Putin

    Another poll, by Axios/Survey Monkey, showed Republican support at 79 percent - compared to 40 percent of respondents overall. The two major American political parties appear largely united in their desire to keep the Kremlin in check.
  • Manchester United target Harry Maguire for £50m

    Manchester United target Harry Maguire for £50m

    Chelsea have entered the race to sign Manchester United star Anthony Martial , according to the Times (h/t ESPN ). That's the big question on every fans' lips as they enter the new season.
    Trump rips Fed for raising interest rates

    Trump rips Fed for raising interest rates

    President Donald Trump pauses during his meeting with members of his Cabinet in the Cabinet Room of the White House Wednesday. For a long, long time the Fed has felt it important to conduct our business that way.
    Modi govt slashes GST rate on several products: Here're details

    Modi govt slashes GST rate on several products: Here're details

    In its meeting in November past year , the Council had reduced rates in over 178 items in the 28 per cent tax bracket. Besides revenue collection, the GST council will now focus on job creation as well, the Finance Minister said.
  • U.S.  to Take Action Against Entities that Support N. Korean Regime

    U.S. to Take Action Against Entities that Support N. Korean Regime

    He said a second message they delivered was that "to achieve that, full implementation of the sanctions is absolutely crucial". Some participants say Pompeo and Kang briefed them on their talks with North Korean officials.
    Gowdy: Trump missed 'good opportunity' to confront Putin

    Gowdy: Trump missed 'good opportunity' to confront Putin

    He said that he believes Trump has entered into a secret deal with Putin, and elaborated on his thought process. He termed evidence of those efforts "overwhelming" and said Trump "needs to say that and act like it".
    Funko is Making a Bunch of Fortnite Toys

    Funko is Making a Bunch of Fortnite Toys

    Both bad and good news for any Fortnite fans this Friday; the Friday Fortnite tournament and the Summer Skirmish are set to clash. Fortnite is now in early access for iOS, PC, PlayStation 4, Xbox One, and is set to release in Summer of 2018 for Android.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.