The Strategist

Alphabet Inc. revenue jumps despite of the EU fine


07/24/2018 - 12:49



Shares of American Alphabet Inc. rose to a record high in the course of trading after the main session on Monday, as the company's profit for the II quarter exceeded market expectations, despite a record fine imposed on Google by the EU. This is reported by MarketWatch.



Vince Smith via flickr
Vince Smith via flickr
In the II quarter, the parent company of Google recorded a net profit of $ 3.2 billion, or $ 4.54 per share, compared with $ 3.52 billion, or $ 5.01 per share, for the same period last year, when Google also faced a major antitrust penalty of the EU.

Excluding the fine, the profit would have been $ 11.75 per share, Alphabet reported. Analysts polled by FactSet on average forecast a profit of $ 9.64 per share.

Alphabet included the fine into its report, although Google’s CEO Sundar Pichai on Monday confirmed that Alphabet plans to challenge the decision of the European Commission.

Alphabet reported revenue of $ 26.24 billion, taking into account the cost of acquiring traffic, compared with $ 20.91 billion in April-June 2017. Analysts on average expected revenue of $ 25.58 billion.

Alphabet shares jumped 5% after the main trading session on Monday. Class A shares have added 15% since the beginning of the year.

Google provides almost all the proceeds of Alphabet, and the lion's share is accounted for by the advertising business. In the second quarter, Google recorded revenue of $ 32.51 billion compared with $ 25.9 billion a year earlier. The traffic acquiring cost (TAC) was $ 6.4 billion. Google's revenue without TAC grew by 25% to $ 26.11 billion (forecast: $ 25.48 billion).

Google's revenue from advertising without TAC in the second quarter was $ 22.39 billion compared to $ 17.58 billion a year earlier. Analysts on average expected revenue growth without taking into account TAC to $ 20.99 billion.

Google's non-advertising revenue, including cloud computing, Google Home speakers, Pixel smartphones, and mobile apps on the Play Store, rose to $ 4.43 billion from $ 3.09 billion a year earlier. Analysts on average expected the figure at $ 4.4 billion.

The Other Bets segment, the more experimental Alphabet business, received revenue of $ 145 million from $ 248 million a year earlier. The operating loss amounted to $ 732 million.

source: marketwatch.com




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