Google takes off as revenue tops expectations
Google parent firm Alphabet reported higher than expected second-quarter profit and revenue tonight, causing shares to jump more than nine per cent after-hours.
The healthy picture eased some concerns regarding the growth of Alphabet-owned companies such as Google, Youtube and its cloud computing division, following a heightened focus on competition in the tech sector.
Sales rose 19 per cent to reach $38.9bn (£31.2bn) in the three months to June, beating the average analyst estimate of $38.2bn.
Around 85 per cent of Alphabet’s revenue stems from advertising, which benefitted from several new tools developed by Google in the quarter across Youtube and Gmail.
Despite this, quarterly costs were near flat compared to the same period a year ago at $29.8bn.
Profit rose to $9.9bn, up from $3.2bn a year earlier when Google recorded the impact of a $5bn fine from EU antitrust regulators over its dominance in mobile software.
Analysts had anticipated earnings of just above $8bn. Google is still said to be facing scrutiny from antitrust regulators elsewhere, thanks to a sector-wide investigation announced by the US Federal Trade Commission earlier this week.
Fellow tech giant Facebook confirmed its place in the probe on Wednesday, though Alphabet did not mention any investigations in its own results report.
“Alphabet continues to strike a good balance between investing for long-term growth and operating margins,” said shareholder Christopher Rossbach, who is also information chief at London investment firm J Stern & Co.
“Alphabet’s outlook remains very bright, with numerous growth options for the company that can
provide significant upside.”