Alphabet, the parent company of Google, did not have an ideal second quarter this year as was revealed by the earnings report that it disclosed recently. Although the numbers would have accounted for a profitable quarter, a hefty fine paid to the EU in charges related to anti-trust issues; the company reported a net loss or downfall of its revenue in the three months from April and June.
The company, which also owns YouTube, said that it recorded a growth regarding revenue generation when the income was compared to that of the second quarter revenue in 2016.
It reportedly earned $3.5 billion on sales of $26 billion. However, the profit could have been much larger without the European Union’s $2.7 billion fine on antitrust charges.
Alphabet reveals second quarterly earnings
The company reported an increase of 21 percent in revenue when compared year-over-year. Last year’s second quarter earnings were reported to be $21.5 billion, while at the end of the same period this year the company was able to generate $25.1 billion regarding profits. The earnings per share also exceeded what Wall Street analysts predicted. Each share of Alphabet was successful in earning $5.01, while the analysts had estimated that it would be near $4.49 per share.
Another interesting aspect revealed by the earnings report is that the paid clicks rose by 52 percent.
However, the cost for each click dropped by 23 percent. Wall Street predicted that the decline would be limited to just 15 percent. This shows that companies paid much lesser to advertise on Google than they previously used to.
Alphabet also reported that the cost to acquire the traffic came to around $5.09 billion, which is a marked increase from the $4.75 billion in the second quarter of 2016.
The operating income for the three months in question was up by 15 percent, but after taking the EU fine into consideration, the company reported losses in Q2 Earnings. Most of the ad revenue was generated by YouTube and mobile search, while it was reported that the popular video streaming website now sports 1.5 billion monthly users.
Google CEO Sundar Pichai now on Alphabet’s board
With the earnings report, it was also revealed that Google’s CEO Sundar Pichai has now been given a spot on Alphabet’s board. The company is currently focusing on providing cloud services to its users and has hired thousands of new employees to do so. Google is also planning on updating the search functionality in its mobile application since most users now use the smartphones to perform the searches.
