Alphabet soars to record after earnings wallop estimates

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Google's parent company Alphabet recorded profits of $3.2 billion in Q2 2018, it has announced, despite the $5 billion fine it received from the EU. Remove the fine and Alphabet's earnings rise to $11.75 per share and net income soars from $3.2 billion for the quarter up to $8.3 billion.

Alphabet's $32.66 billion in second-quarter revenue, 86 percent of which came from Google's advertising business, beat an average estimate of $32.17 billion. Thus Alphabet shares have been up as much as 5 per cent in afterhours trading.

The European Commission fined Google for monopoly with its Android operating system, accusing it of violating the EU competition rules. "As we have noted previously, we are happy to underwrite Google's investments as this should enable the company to sustain what should be greater-than-20% FX-neutral revenue growth over the longer term".

Analysts had expected net income of $6.7 billion on revenue of $25.6 billion.

European authorities ordered Google to stop effectively requiring phone-makers in Europe to install Google's search engine and Chrome internet browser on their devices in order to use the Android software.

Even if Google's unsuccessful in fighting the fine, $5 billion is hardly a major setback for the company, which reported total revenue of $32.7 billion this quarter alone.

Business Insider has contacted Google for comment. The company had been plagued by similar scandals throughout previous year.

"Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors", Commissioner Margrethe Vestager said at the time of the fine.

"I'm confident that we can find a way to make sure Android is available at scale to users everywhere", Google's chief executive, Sundar Pichai, told investors.

"We're pleased with the ongoing momentum in our advertising businesses", said Porat on a conference call for investors, adding that Alphlabet has high hopes for the positive impact of machine learning on its ad business. The others: Apple (valued at $940 billion) and Amazon ($880 billion).

Revenue in Alphabet's "moonshot" Other Bets category came in at $145 million with operating losses rising to $732 million.

Some in the industry also cite GDPR, which convinced more advertisers to funnel ad spending to Google and its main rival Facebook Inc.