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EARNINGS PREVIEW - Alphabet shares nudge higher as second quarter sales seen higher

The tech giant has already accounted for the firm with a $2.74 billion charge..
EARNINGS PREVIEW - Alphabet shares nudge higher as second quarter sales seen higher
The EU regulator found Google had promoted its own shopping service above others

Google parent Alphabet (NASDAQA:GOOGL) will unveil second quarter numbers after the bell and fallout from its recent $2.7bn record fine from European regulators is likely to be a focus.

The tech giant has already accounted for the fine with a $2.74 billion charge for the three months to end June.

Promoting own shopping service.

The regulator found that the search giant had promoted its own shopping service above others obviously leading to competition infringements.

But the real question mark, say analysts, is what this may mean for Google's business ahead in Europe and indeed, in the US, and whether the group is expecting any more fines  coming down the track.

The European fine has already  weighed on Wall Street forecasts for the group.

Heavyweight Goldman Sachs adjusted its Q2 forecasts, by cutting Alphabet’s profit by almost 50% to $4.60 a share from $8.64 a share to account for the big charge.

Financial research group MKM Partners  broke down the charge into a negative impact of $3.89 a shares for Alphabet.

Profit expectations lowered..

As a whole, the company is expected to report a profit for the three months of $4.46 a share, based on consensus Wall Street forecasts, down from $8.42 a year earlier,  to reflect the fine.

Sales, meanwhile, are expected to come in around $25.6 billion, up 19% compared to the same time last year, driven by its mobile advertising and YouTube Videos and up 3.9% from $20.1 billion last quarter - which beat expectations of $19.75bn.

Traders will also be interested later to see what happens to advertising revenue and net income after they rose 18% and 29% respectively on a year-on-year basis in the first quarter.

Alphabet noted that revenue from advertising from all their regions around the world increased when compared with first-quarter last year.

Investors will also be keen to see how the driverless cars division Waymo and the life sciences business Verily are doing.

But as CMC analyst David Madden put it: "...investors will want to either see a narrowing of the loss, or at least major strides to profitability being achieved."

Alphabet shares nudged 0.03% higher in pre-market to stand at $994.12 and then later in the session added 0.57% to $999.52.

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