Google Parent Alphabet Q2 Profit Beats Wall Street; Shares Up
Alphabet Inc. (GOOG,GOOGL), Monday reported a drop in profit for the second quarter, as the results were impacted by a $5 billion hefty fine imposed by European regulators.
Nonetheless, shares of the parent company of Google gained over 4 percent in extended session after its adjusted results trumped Wall Street estimates, driven largely by strong revenue growth reflecting soaring online advertisement sales.
Alphabet’s second-quarter profit was $3.20 billion or $4.54 per share compared with $3.52 billion or $5.01 per share last year.
The European Commission, the competition watchdog of EU, fined Google 4.3 billion euros or about $5 billion last week for misusing the dominance of its mobile operating system Android. The commission claimed that Google breached E.U.’s competition rules by, among other things, forcing cell-phone manufacturers to pre-install the firm’s search engine and Chrome Web browser on Android phones. Google’s Android operating system is used by more than 80% of the world’s smartphones.
On an adjusted basis, earnings for the quarter surged to $8.27 billion or $11.75 per share from $6.26 billion or $8.90 per share last year. On average, 31 analysts polled by Thomson Reuters estimated earnings of $9.54 per share for the quarter. Analysts’ estimates typically exclude one-time items.
Revenues for the quarter jumped 26 percent to $32.66 billion from $26.01 billion last year. Analysts had a consensus revenue estimate of $32.19 billion for the quarter.
Google advertising revenues rose to $28.09 billion from $22.67 billion last year, while Google other revenues rose to $4.43 billion from $3.24 billion.
The company said paid clicks on Google properties jumped 58 percent from last year and 15 percent from previous quarter. Meanwhile, aggregate cost-per-click dropped 22 percent from a year ago and 10 percent from prior quarter.
“We delivered another quarter of very strong performance, with revenues of $32.7 billion, up 26% versus the second quarter of 2017 and 23% on a constant currency basis. Our investments are driving great experiences for users, strong results for advertisers, and new business opportunities for Google and Alphabet,” said Ruth Porat, CFO of Alphabet and Google.
GOOG closed Monday’s trading at $1,205.50, up $20.59 or 1.74%, on the Nasdaq. The stock further gained $53.34 or 4.42% in the after hours trading.
by RTTNews Staff Writer
Source: Read Full Article