Alphabet revenues hit $32.7 billion on strong ad sales

Alphabet revenues hit $32.7 billion on strong ad sales

Shares in Google parent Alphabet jumped in after-hours trading Monday as the company's second-quarter results exceeded Wall Street forecasts after taking into account a $5 billion United States charge levied by European regulators.

Alphabet is expected to report per-share earnings of $9.66, excluding the impact of a $5.07 billion charge accrued in connection with a European Commission fine, according to analysts polled by FactSet.

Revenue jumped 26pc to $32.7m, a substantial beat on the $25.6m analysts had been expecting, driven by a 24pc rise in advertising revenue and a 37pc increase in "other revenue", which includes its cloud division.

Shares of Google were up significantly after hours, rising 5 percent immediately after the numbers were released. The EU accused the company of abusing its dominant Android mobile-operating system to cement the popularity of Google apps and services.

European authorities ordered Google to stop effectively requiring phone-makers in Europe to install Google's search engine and Chrome internet browser on their devices in order to use the Android software. Google's advertising business grew 24 percent. Company Chief Financial Officer Ruth Porat said the investments were necessary for the company to maintain an edge in machine learning and other future technologies.

Google also has tweaked its comparison shopping service as it strives to comply with an European Union ruling from past year, and it plans to soon release changes to how it handles political ads. The company's stock took a slight hit after news of the fine broke last week, but it was trading at $1,211 per share at market close, up 7 percent over the past month.

Last week, we told you that Google had been fined the princely sum of $5.04 billion by the EU.

Googlechief executive Sundar Pichai said that it was too soon to speculate on how Android may be affected by the ruling but said the company would take a "constructive approach". It is gaining ground on Amazon, the ecommerce giant that is the world's second...

The reason for the surge was better than expected profits in Google's ad business, which continues to dominate.

Alphabet has also branched out into a range of other areas, including cloud computing, YouTube and driverless cars.

Its Other Bets segment, which includes companies like the driverless auto firm Waymo, reported a quarterly operating loss of $732m, up from $633m previous year.

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