Economy

Alphabet hits a record high after earnings top expectations (GOOGL)

Alphabet hits a record high after earnings top expectations (GOOGL)

For a company that was just hit with staggering $5 billion fine, Google and parent company Alphabet are as unbothered as ever.

Alphabet's stock price is right now sitting at $1,255 apiece, up 3.6 per cent in after-hours trading.

Pichai also highlighted Alphabet's computing video and advertising platforms, noting that the company generated $7 billion in revenue for its software developers, content creators and publishers. The EU Competition Commission found that Google violated antitrust regulations by requiring that phone manufacturers install certain Google apps on Android phones (like Search and Chrome), pay these manufacturers to limit the installation of Search apps on their phones to Google Search, and ban the release of handsets using unapproved versions of Android.

Alphabet's "other bets" saw a 49 percent jump in revenues from a year ago they still lost money, with an operating loss of $732 million in the past quarter.

Google's net income fell short of Q2 a year ago largely because of the $5 billion fine recently imposed on the company by the European Commission.

A new privacy law enacted by the European Union in May led the company to revise user privacy disclosures and clamp down on how it shares data with advertising customers. Google plans to contest the ruling.

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The penalty from the European Commission topped a previous record fine of $2.7 billion the company was dealt in 2017 after EU regulators said Google violated antitrust rules for online shopping practices.

Still, Alphabet's outlook remains tempered by cost concerns, Canaccord Genuity analyst Michael Graham said in a report this month.

Alphabet trails Facebook, Amazon.com Inc and Twitter Inc in valuation as measured by the ratio of enterprise value to expected earnings. Government pressure to improve moderation of user-created content has forced Google to hire more analysts. 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.

FILE PHOTO: The waxing moon is seen over the logo of Google at its European Engineering Center in Zurich, Switzerland July 19, 2018.

Google, though, has increasingly linked together its services technologically through automated ad-buying tools that empower algorithms rather than humans to pick where ads are placed. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of $9.45 per share.