Alphabet trounces profit estimates on ad sales surge

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Google owner Alphabet batted off recent clashes with European regulators to post second quarter results which topped expectations, sending its shares surging in after-hours trade. When excluding the fine, earnings came to $11.75 United States per share, which topped the average estimate of $9.45 USA per share by analysts surveyed by Zacks Investment Research.

Alphabet shares have risen 15 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 5 percent. That said, it's worth considering that if Google continues to run into trouble with the government, such fines could continue to impact the company's business. Analysts were expecting US$25.55 billion, according to data compiled by Bloomberg.

Amazon's encroachment into advertising has threatened Google's lucrative deals with media companies and advertisers. After Google complied with last year's charges by the European Union related to its shopping service, competitors complained that its solution did little to reduce the harm to their businesses.

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"We delivered another quarter of very strong performance, with revenues of $32.7 billion, up 26 percent versus the second quarter of 2017", Google CEO Ruth Porat said in a prepared statement. The company's stock took a slight hit after news of the fine broke last week, but it was trading at $1,211 per share at market close, up 7 percent over the past month.

Without the fine - which is being appealed by the company - profit would have been $8.3 billion. "We are analyzing the decision and I think it's too early to comment or speculate", he said.

Reacting to another monster quarter from Google parent Alphabet Inc., a CNBC analyst wondered out loud if the tech giant has become more powerful than the USA government.

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Google is appealing the ruling, which found it abused its dominance in mobile software. On top of this, $4.4 billion came from its "other revenues" section which includes the Play Store and sales of consumer devices such as Pixel phones, Google Home speakers, and Chromecasts.

"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".

"Google has to make sure their advertising clients are happy with the placement of their ads", he told Cheddar after the results.

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Alphabet's other projects saw losses, despite a 49 percent jump in revenues from a year ago.

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