Alphabet profit hit by EU fine on Google

San Francisco (AFP) – Google parent Alphabet on Monday saw shares slide as the market reacted to a massive fine by the European Commission and word that success in mobile, cloud and YouTube is coming with higher costs.

Alphabet reported a quarterly profit of $3.5 billion, in a sharp decline from a year ago, with a $2.74 billion antitrust fine in Europe biting into earnings.

The technology giant reported that revenue grew to $26 billion in the recently ended quarter, and that profit would have tallied nearly $6.3 billion if it were not for the fine levied on search engine Google by the European Commission.

Earnings for the quarter fell 28 percent from the same period last year.

Revenue was up 21 percent from the same quarter last year.

Alphabet chief financial officer Ruth Porat said the report showed “strong growth with great underlying momentum,” as the company makes “focused investments in new revenue streams.”

Alphabet shares slid about 3.1 percent to $967.20 in after-market trades that followed the release of the earnings figures.

Reasons for the drop likely included the mixed blessing of Google use booming on mobile devices, bringing in more revenue but also paying more to websites hosting ads.

Alphabet also said it was spending more money on operating data centers, acquiring YouTube content, and its line of hardware, which were cited as growing businesses at the company.

– Mulling options –

Investors have been concerned about what the regulatory trouble in Europe means for Alphabet, which gets most of its money from Google advertising while investing in “other bets” such as self-driving cars and life sciences.

Alphabet took in $248 million in revenue and posted a narrowed loss of $772 million in its “other bets” category in the recently ended quarter.

Google and the EU are gearing up for a battle that could last years, with the Silicon Valley behemoth facing a relentless challenge to its ambition to expand beyond search results.

Brussels has already spent seven years…

Read the full article at the Original Source..

Back to Top