Alphabet Reports Strong Profit Despite Recent Google Fine
Google is still raking in marketing dollars from advertisers, propelling the online search giant to another strong quarter in the face of costly regulatory trouble in Europe.
Google parent Alphabet on Monday reported that its profit margin rose in the second quarter.
Growth in the company's traffic acquisition costs, a key expense, decreased for the first time in three years compared with the year-ago period. Operating margin rose to 24 percent excluding a $5 billion antitrust fine, up from 22.5 percent last quarter.
Adjusted earnings per share were $10.58.
Alphabet said earnings per share were $11.75 before adjustments, which removes $1.1 billion in investment income from a new accounting standard for unrealized gains as well as the fine issued last week by the European Commission. Google is appealing the ruling, which found it abused its dominance in mobile software.
Alphabet reported $32.66 billion in second-quarter revenue, 86 percent of which came from Google's advertising business.
The company's other revenue bucket, which includes cloud, hardware and app sales, grew 37 percent to $4.4 billion in the second quarter.
Cost increases have come across the enterprise. Government pressure to improve moderation of user-created content has forced Google to hire more analysts. Google's YouTube has increased spending on video content to keep consumers from shifting to offerings from Netflix and expanding media conglomerates such as AT&T Inc.
Amazon's encroachment into advertising has threatened Google's deals with media companies and advertisers.