Alphabet’s revenue leaps 21% in Q2
• Alphabet Inc. surpassed expectations for quarterly revenue and earnings on Monday, reporting higher advertising sales across its platforms and trying to move past a record $ 2.7- billion European Union fine by taking the entire charge at once.
On a consolidated basis, revenue for the owner of the owner of the Google search engine and the YouTube video service rose about 21 per cent to $ 26.01 billion ( all figures US) in the second quarter ended on June 30, beating the analysts’ average estimate of $ 25.65 billion, according to Thomson Reuters I/B/E/S.
Earnings per share was $5.01, beating an average estimate of $ 4.49, and would have been $ 8.90 if not for the EU antitrust fine announced last month, Alphabet said. Earnings per share was $ 7 in the second quarter of 2016.
But the company’s shares, which closed up in regul ar t rading on Monday, fell about three per cent to $ 968 after the bell. Shares of Alphabet had gained nearly 26 per cent this year through Monday’s close.
“You’re seeing some profit- taking after a pretty good run,” FBN Securities analyst Shebly Seyrafi said in an interview.
One potential blemish in the earnings report was aggregate cost per click, which fell 23 per cent year- overyear, but the impact on Google’s ad business was not immediately clear.
EU antitrust enforcers last month hit Google with a record 2.4-billion-euro ($3.5 billion) fine for favouring its own shopping service, taking a tough line in the first of three probes of its dominance in searches and smart- phone operating systems.
Alphabet said shortly after the EU announcement that the company would report the whole fine as an expense in the second quarter.
Revenue was boosted by robust demand for advertising on mobile and on YouTube. Google’s ad revenue, which accounts for a lion’s share of its business, rose 18.4 per cent to $ 22.67 billion.
The company faces intensifying competition from social media giant Facebook Inc. for advertising dollars. The companies t ogether dominate t he online ad market.
This year, Google is expected to generate about $ 73.75 billion in net digital ad revenue worldwide, a 17.8 per cent jump from a year earlier, according to research firm eMarketer.