Alphabet profits jump despite record European Union fine

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Shares of Google parent Alphabet soared to all-time highs Monday evening, after the company posted a surge in ad revenue that partially made up for a record-breaking $5 billion fine from the EU.

In the same quarter previous year, Alphabet reported earnings of $8.90 per share, excluding a $2.7 billion regulatory fine the European Union imposed on the tech giant.

Alphabet's overall revenues continue to be largely derived from advertising on Google's own properties and its network members' properties, to the tune of $28 billion for the quarter.

Investors reacted by sending Alphabet shares up by as much as 5.2 per to $1,274.16 in after-hours trading in NY.

The EU fine followed an extensive investigation into the tech company's policy of forcing smartphone manufacturers to pre-install Google's search and browser apps on devices that use Android, its mobile operating system. CEO Sundar Pichai reiterated that the company plans to appeal the decision.

A majority of the revenues came from its search engine and the YouTube video streaming website, with revenues totaling $32.5 billion. Its effective tax rate reached 24 per cent, up from 19 per cent during the same period previous year. The shares rose as much as 5.3 per cent, the most in nearly nine months, to US$1,275 at the market open in New York Tuesday.

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Alphabet reported revenues of $32.7 billion, up 26 per cent versus the second quarter of 2017.

In a statement, Ruth Porat, chief financial officer of Alphabet and Google, said the company had delivered "another quarter of very strong performance".

Google must now bring this conduct to an end within 90 days or face penalty payments of up to 5 percent of the average daily worldwide turnover of Alphabet, the EC said.

Asked about the impact of Europe's GDPR data rules on its business, Pichai said it's too early to tell, adding, "We've always been focused on user privacy". It is gaining ground on Amazon, the ecommerce giant that is the world's second... Other revenue, which includes its cloud business and hardware, was $4.4 billion.

'Our investments are driving great experiences for users, strong results for advertisers and new business opportunities for Google and Alphabet'. Alphabet recently moved its Loon balloon internet project and Wing autonomous drone initiatives under the Other Bets group, alongside Waymo, Fiber, Verily and cybersecurity outfit Chronicle.

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