Alphabet profits jump despite record EU fine
MOUNTAIN VIEW, Calif. — Google-parent Alphabet announced surging profits, shrugging off the impact of a $5 billion fine by the European Union.
The internet giant on Monday reported second-quarter profit of $3.2 billion even after accounting for the fine, imposed by the EU earlier this month for abusing its market dominance On a per-share basis, the Mountain View, California-based company said it had net income of $4.54. Earnings, adjusted for non-recurring costs, came to $11.75 per share.
The results topped Wall Street expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of $9.45 per share.
Top-line growth was also strong. Alphabet reported total revenue of $32.7 billion, up 26 percent from the year-ago period. After subtracting Alphabet's advertising commissions, revenue was $26.2 billion, also exceeding Street forecasts. Thirteen analysts surveyed by Zacks expected revenue of $25.6 billion.
"Our investments are driving great experiences for users, strong results for advertisers, and new business opportunities for Google and Alphabet," said Ruth Porat, chief financial officer for both Alphabet and Google in a statement.
Alphabet shares have risen 15 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 5 percent. In the final minutes of trading on Monday, shares hit $1,211, a climb of 22 percent in the last 12 months.
In a call with analysts to discuss Alphabet's latest earnings, CEO Sundar Pichai emphasized the company's growing use of artificial intelligence to improve Google's news delivery, mapping and photo features.
Pichai also highlighted Alphabet's computing video and advertising platforms, noting that the company generated $7 billion in revenue for its software developers, content creators and publishers.
"While advertising on YouTube is an incredibly strong and growing source of income for creators, we are also investing in new ways for creators to generate revenue on the platform, including pay channel memberships, merchandise shelves on YouTube channels and endorsement opportunities through a company we acquired in 2016, Fame," he said.
