Google parent Alphabet’s stock price leapt after reporting stronger-than-expected results driven by gains in online advertising.
The internet giant said profits tripled in the second quarter from a year earlier to $9.9 billion while revenues increased 19 percent to $38.9 billion. Shares in Alphabet rallied some 8.6 percent in after-hours trade on the report, which appeared to ease fears about slowing growth.
Also helping shares was an announcement that the company would spend an additional $25 billion on stock buybacks. Profits were sharply higher than the same period last year when Google was forced to pay a $5 billion fine to settle antitrust actions in the European Union.
Google accounted for the lion’s share of revenue and profits for the company with “other bets” — including its autonomous driving division Waymo and its life sciences and cybersecurity units — bringing in a modest $162 million in revenue with an operating loss of $989 million.
Alphabet chief financial officer Ruth Porat said the results showed “we’re delivering strong growth.” Google’s digital ad revenues rose 16 percent from a year ago and accounted for $32 billion of the company’s revenues.
Google is the dominant player in internet search and as a result holds an estimated 31 percent share of digital advertising, according to the research firm eMarketer. Its power has attracted scrutiny from antitrust regulators in Europe and more recently in the United States, where officials have said “major online platforms” would be reviewed for possible impacts on competition.
Google has denied abusing its market position but has been seeking to diversify its revenue base with more hardware offerings including smartphones and digital assistants. Google CEO Sundar Pichai said in a statement the company is working on improvements to search, maps and its Google Assistant. “I’m incredibly excited by the momentum across Google’s businesses and the innovation that is fueling our growth,” he said.—AFP