Alphabet Inc on Monday reported that expenses from its Google search business grew more slowly in the second quarter while revenue rose more steeply than analysts had anticipated, boosting profit above Wall Street targets and pushing shares up 3.6 percent after hours.
While the European Union fine, announced last week as a penalty for abusing the market dominance of its Android operating system, did eat into profit, on an adjusted basis the company posted earnings of $11.75 a share, ahead of analyst estimates for $9.59.
But it's important to remember that simply paying the fine - if Google loses its appeal - doesn't make the problem go away.
Even if Google's unsuccessful in fighting the fine, $5 billion is hardly a major setback for the company, which reported total revenue of $32.7 billion this quarter alone.More news: Erdogan says called Ozil, praises decision to quit German team
The internet search leader posted revenue of $32.66 billion United States in the period, up 26 per cent, driven by ad revenue from mobile searches. With the regulatory issue settled, they said, Google could get back to focusing on selling ads across the internet. Earnings, adjusted for non-recurring costs, came to $11.75 per share.
US26.24 billion (excluding traffic acquisition costs) compared to an expected $US25.55 billion.
Profit dipped 9.3% to $3.2 billion in the second quarter after accounting for the European Union fines, the company said.
Alphabet ended the quarter with 89,058 employees, and Porat said the most sizable increases in headcount came from hiring engineers and sales people for the cloud business. Its enterprise value, or market capitalization and debt minus cash, trades at 13 times expected earnings for the next 12 months, compared with about 14 times for Facebook, 24 times for Twitter and 26 times for Amazon, according to TR data.More news: Stocks end slightly lower as traders shrug off trade talk
During its earnings call, CEO Sundar Pichai declined to answer any questions about how the EC's fine would impact its mobile business.
But the issues have yet to halt Google, which has grown quarterly revenue at least 20 percent year-over-year for two straight years. Other revenue, which includes its cloud business and hardware, was $4.4 billion.
Other Bets, the home of Google's riskier, experimental businesses, lost US$732 million in the quarter, versus a loss of US$633 million in the same period a year earlier.More news: In election-charged Pakistan, Mahathir makes an 'appearance'
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