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Google parent Alphabet posts quarterly profit decline after record EU antitrust fine

Alphabet's second quarter revenue was boosted by Google advertising revenues
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Google's second quarter profits were dented by an EU fine

Google’s parent company Alphabet Inc (NASDAQ:GOOG) posted a drop in quarterly profits, reflecting the impact of a record US$2.7bn EU fine.

Net income in the three months to 30 June came to US$3.5bn, compared to US$4.8bn the same period a year ago. Diluted earnings per share fell to US$5.01 from US$7.0.

The search engine was forced to pay an antitrust fine to the European Commission last month for favouring its own shopping service. It marked the biggest ever competition fine from the Commission and followed a seven-year investigation into claims the technology giant abused its internet search monopoly. Alphabet is considering an appeal. 

READ: Google to lose out on billions in shopping revenues every year following EU ruling

Excluding the fine, Alphabet would have made EPS of US$8.90.

EU antitrust officials are also investigating the company’s practice of bundling its Android operating system with popular smartphone apps such as Google Maps.

Google chief executive, Sundar Pichai, said the group would fight to continue this practice.

"It's a very open market, open ecosystem, and it works well for everyone, and I expect that to continue," Pichai said in an analyst call.

Revenue jumped 21% to US$26.01bn from US$21.5bn with Google accounting for most of the growth. Google revenue rose to US$25.8bn from US$21.3bn, boosted by an 18.4% increase in advertising revenue.

Paid clicks, where advertisers only pay for the adverts users clicked on, rose 52%.

Alphabet’s other businesses, including the Nest smart home devices unit and the Waymo self-driving car company, delivered an increase in revenue to US$248mln from US$185mln a year earlier. 

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