Google par­ent’s 2Q sales meet fore­casts

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - MARK BER­GEN

Al­pha­bet Inc. re­ported sec­ond-quar­ter rev­enue on Mon­day that met an­a­lysts’ pro­jec­tions, fall­ing short of the most-op­ti­mistic es­ti­mates, and said the cost of its Google ads de­clined.

The com­pany’s profit was also ham­mered by a record an­titrust fine from the Euro­pean Union.

Sales, mi­nus part­ner pay­outs, were $20.92 bil­lion, in line with an­a­lysts’ con­sen­sus fore­casts, but be­low some more bullish ex­pec­ta­tions. Es­ti­mates ranged from $20.55 bil­lion to $21.61 bil­lion, ac­cord­ing to data com­piled by Bloomberg.

Google also re­ported a 23 per­cent de­cline in the av­er­age price of its ads, com­pared to a year ear­lier. That was big­ger than the first quar­ter’s 19 per­cent year-over-year drop.

Al­pha­bet shares fell al­most 3 per­cent in af­ter-hours trad­ing. The stock closed up 0.5 per­cent at $998.31 in New York trad­ing ear­lier on Mon­day.

The to­tal num­ber of Google ads users clicked rose quickly, skewed heav­ily to­ward Google’s own prop­er­ties, such as Search and YouTube.

“The big­gest con­trib­u­tor to growth was mo­bile search and it’s clearly an area where we con­tinue to grow from our un­der­ly­ing en­gi­neer­ing strength,” Chief Fi­nan­cial Of­fi­cer Ruth Po­rat said dur­ing a con­fer­ence call with re­porters.

Reg­u­la­tors in Europe levied a $2.7 bil­lion penalty in June, say­ing Google skewed its gen­eral search re­sults to thwart smaller shop­ping search ser­vices. The Moun­tain View, Calif.-based com­pany dis­agreed and is con­sid­er­ing an ap­peal. Two more an­titrust in­ves­ti­ga­tions against Google sit on the EU docket, a con­cern for some an­a­lysts.

The com­pany ac­counted for the fine as a one-time dent on profit dur­ing the quar­ter, bring­ing net in­come to $5.01 per share. An­a­lysts were ex­pect­ing $4.45 per share, in­clud­ing the EU fine, ac­cord­ing to fig­ures com­piled by Bloomberg.

Spend­ing on Al­pha­bet’s “Other Bets” — sub­sidiaries in­clud­ing its ven­ture cap­i­tal and self-driv­ing car di­vi­sions — fell sharply dur­ing the quar­ter. Po­rat at­trib­uted this to an on­go­ing re­treat in the ex­pan­sion of its Google Fiber fast Internet ser­vice.

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