Date
21 October 2018
Strong growth in Google's advertising business helped its corporate parent Alphabet post better-than-expected second-quarter results. Photo: Reuters
Strong growth in Google's advertising business helped its corporate parent Alphabet post better-than-expected second-quarter results. Photo: Reuters

Alphabet adjusted earnings beat estimates on Google ad sales

Google parent Alphabet reported quarterly earnings that topped analyst expectations, on robust growth in revenue from advertising and cloud computing and reined-in expenses in search business.

Traffic acquisition costs decreased for the first time in three years compared with the year-ago period, Reuters reports.

The Internet giant on Monday announced adjusted earnings per share of US$10.58 for the second quarter, compared with analyst forecasts of US$9.52 on average.

Operating margin rose to 24 percent excluding a US$5 billion antitrust fine, up from 22 percent in the previous quarter, according to the report.

“Most impressive was that it looks like the headwind from traffic acquisition costs have started to ease,” Atlantic Equities analyst James Cordwell told Reuters.

The company posted US$3.2 billion in net income for the second quarter, even after including the antitrust fine. 

Revenue stood at US$32.66 billion for the quarter, with 86 percent coming from Google’s advertising business, beating an average estimate of US$32.17 billion.

Google’s dominance in online advertising has been challenged this year by the antitrust battle over its Android mobile software and other regulatory actions.

But the issues have yet to halt the search giant, which has grown quarterly revenue at least 20 percent year-over-year for two straight years, the report noted.

“There was never a question about Google’s dominance of a buoyant digital ads market,” Richard Kramer, an analyst with Arete Research, was quoted as saying.

The better-than-expected quarterly results pushed Alphabet’s shares up as much as 6.1 percent in after-hours trading on Monday, putting them on course for a record, according to Bloomberg.

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RC

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