Google parent Alphabet shares lifted 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.
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.
But it's important to remember that simply paying the fine - if Google loses its appeal - doesn't make the problem go away.
The European Union's previous record fine was also aimed at Google, a $2.7 billion levy it imposed a year ago for unfairly favoring its comparison-shopping service in its search results.
TAC, an important metric in Google's ad business, crept up to 23% of ad revenue in Q2, up slightly from the 22% reported during the same period past year. "Even though Google has struggled with the issue, and YouTube specifically.at the end of the day Google offers very valuable advertising real estate and most, if not all, of their customers end up going back".
The bulk of Alphabet's revenue continues to come from advertising, which amounted to $28bn for the quarter, or roughly 88 per cent of sales.
As usual, Alphabet will be holding a conference call with CFO Ruth Porat and Google CEO Sundar Pichai at 4:30 PM ET, and we'll be updating this post with any additional information the company shares. (FB.O). "One of the unintentional consequences of GDPR is the strengthening of the duopoly", said Gil Elbaz, a former Google executive who now runs the marketing firm Factual.
The company reported second-quarter profit of $3.2 billion US.
Capital expenditures rose too, reaching $5.5bn from $2.8bn, an increase attributed to data center and property investments.
Through the close of regular-session trading Monday, Alphabet shares had risen 15 per cent since the beginning of the year, while the Standard & Poor's 500 index has risen five per cent. The others: Apple (valued at $940 billion) and Amazon ($880 billion). "Other bets", such as Waymo and Fiber, saw revenue rise 49% but only totaled $145 million in the quarter.
"Alphabet also breaks out the revenues and losses for its 'Other Bets, ' like healthcare company Verily, internet service provider Fiber, and self-driving auto company Waymo".