Alphabet shrugs off EU's record €4.3bn fine

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Google's parent company Alphabet recorded profits of $3.2 billion in Q2 2018, it has announced, despite the $5 billion fine it received from the EU.

Revenue growth has accelerated from the 21% rate of a year ago, thanks in part to an increase in the number of paid clicks, which rose 58% from the year-ago quarter. Thus Alphabet shares have been up as much as 5 per cent in afterhours trading.

Google said little about the fine, which regulators said is for anticompetitive behavior with its Android mobile operating system, in its earnings release. Google has said it will appeal the EC decision. Even including the record fine, the company generated $3.2 billion in net income during the second quarter.

But Alphabet's outlook is tempered by cost concerns, and Amazon.com Inc's encroachment into advertising has threatened Google's lucrative deals with media companies and advertisers.

Google also has tweaked its comparison shopping service as it strives to comply with an European Union ruling from previous year, and it plans to soon release changes to how it handles political ads.

Investors welcomed the news enough to push Alphabet's stock up to an all-time high of $1,265 a share late Monday, valuing the stock at around $875 million.

"Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors", Commissioner Margrethe Vestager said at the time of the fine.

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Alphabet reported revenues of $32.7 billion, up 26 per cent versus the second quarter of 2017.

Europe's new data-privacy rule, known as the General Data Protection Regulation, also appeared to have had little effect on Google's bottom line.

"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.

"One of the biggest opportunities for investment continues to be in our ads business", Porat told analysts on the earnings call.

While second-quarter sales jumped, so did costs for the technology giant. Sales from its "Other Bets", which include Google's cloud business and hardware division, rose almost 50 percent to $145 million.

Its Other Bets segment, which includes companies like the driverless auto firm Waymo, reported a quarterly operating loss of $732m, up from $633m a year ago.

"Alphabet also breaks out the revenues and losses for its 'Other Bets, ' like healthcare company Verily, internet service provider Fiber, and self-driving auto company Waymo".

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