Alphabet soars to record after earnings wallop estimates

Alphabet soars to record after earnings wallop estimates

Alphabet soars to record after earnings wallop estimates

Google parent company Alphabet reported a sharp drop in profits on Monday as the company absorbed the likely $5bn cost of a record-breaking fine from European regulators. Remove the fine and Alphabet's earnings rise to $11.75 per share and net income soars from $3.2 billion for the quarter up to $8.3 billion. Operating income was just $2.8 billion, which is due in large part to the recent $5 billion fine from the European Union.

Mr Pichai also said it was too early to say what effect Europe's new privacy law - the General Data Protection Regulation (GDPR) - is having. That said, it's worth considering that if Google continues to run into trouble with the government, such fines could continue to impact the company's business.

On the face of it, the European Commission's massive fine hasn't really hurt Alphabet - at least not in the eyes of investors.

Verizon rose 2.4 percent after posting better-than-expected quarterly profit and revenue as the wireless carrier attracted more subscribers with unlimited data plans.

Google has continued to give search ads more prominent space on mobile phones, helping to fuel the brisk sales growth.

Macquarie Group senior analyst Benjamin Schachter wrote in a report this month that "we are approaching a point where we (and we believe The Street collectively) are not understanding the size of search vs YouTube vs programmatic, which may lead to increasing volatility" in share price. If you were to look at Alphabet's core operations, without taking into account the $5 billion fine, we'd be looking at a quarter with $7.88 billion in operating income - a full $1 billion higher than the same quarter past year. It is gaining ground on Amazon, the ecommerce giant that is the world's second...

Another good signーAlphabet also saw slowing growth in its so-called traffic acquisition costs, or how much the company pays to drive views to its sites. Google's capital spending climbed to US$5.3 billion, up 87 per cent from the same period in 2017.

The rest of the revenue came from Google's non-advertising businesses, which include selling apps, gadgets and cloud computing services, and ventures such as offering internet service. In the year-ago quarter, ads were 86 percent.

Pichai mentioned new cloud customers including Domino's Pizza Inc., SoundCloud Ltd. and PricewaterhouseCoopers LLP, during the call with analysts.

Alphabet's "other bets", investments in less established ventures like Calico, Fiber, Nest, Verily, and Waymo, posted an operating loss of $732m, about $100m more than the year-ago quarter, on revenue of $145m.

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