Google Parent Alphabet Sees Record Highs Despite EU Fine

Google parent Alphabet shares lifted Monday on a stronger-than-expected earnings report for the past quarter, as the tech giant’s results eased concerns over huge fines imposed by the European Union for antitrust actions.

Profit dipped 9.3 percent to $3.2 billion (roughly Rs. 22,000 crores) in the second quarter after accounting for the EU fines, the company said. Revenues meanwhile jumped 26 percent from a year ago to $32.7 billion (roughly Rs. 2.25 lakh crores), better than most analysts expected. Shares in Alphabet jumped 3.6 percent to $1,254.12 (roughly Rs. 86,400) in after-hours trade, which could mark a new record for the Internet giant if confirmed when markets open Tuesday.

“We delivered another quarter of very strong performance,” chief financial officer Ruth Porat said. “Our investments are driving great experiences for users, strong results for advertisers and new business opportunities for Google and Alphabet.”

Last week, EU officials slapped a EUR 4.34 billion ($5 billion) penalty on the US tech giant for illegally abusing the dominance of its operating system for mobile devices.

Without the fine – which is being appealed by the company – profit would have been $8.3 billion. Brussels accused Google of using the Android system’s near-stranglehold on smartphones and tablets to promote the use of its own Google search engine and shut out rivals.

Daniel Ives of GBH Insights said in a research note that despite some regulatory concerns, “advertising and ‘bread and butter’ search revenues were healthy and a good barometer of potential strength heading into the rest of 2018/2019.”

The future of the Android mobile operating system – which powers more than 85 percent of smartphones – has been clouded by the EU action, which could force Google to change its business arrangements with device makers. Google chief 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.”

“We look forward to finding a solution that preserves the enormous benefits of Android to users,” Pichai told analysts after the earnings release.

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