Alphabet shrugs off EU's record €4.3bn fine

Google's attempt to settle its antitrust case in Europe was too little and too late

Remove the fine and Alphabet's earnings rise to $11.75 per share and net income soars from $3.2 billion for the quarter up to $8.3 billion.

Alphabet continues to look up at Amazon Web Services and Microsoft Azure in the cloud market, although it did disclose earlier this year that combined revenue from Google Cloud and G Suite reached $1 billion a quarter. In the past, Google earned as much as 97 percent of its revenues from ads, but that number has been falling.

Google faced a record European Union antitrust fine of 4.3 billion euros over its Android smartphone system, in a ruling that risks a fresh clash between Brussels and Washington. Google is set to appeal the decision, and has already argued that apps are easy to remove and that OEMs are free to preload their own alternatives alongside Google's offerings.

Alphabet shares also have been lifted, according to analysts, by a forecast that expense growth would level off in the second quarter because the company entered the second year of a costly deal to make Google the default search provider on iPhones.

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Even if Google's unsuccessful in fighting the fine, $5 billion is hardly a major setback for the company, which reported total revenue of $32.7 billion this quarter alone. After Google complied with last year's charges by the European Union related to its shopping service, competitors complained that its solution did little to reduce the harm to their businesses. The shares rose as much as 5.3 per cent, the most in nearly nine months, to US$1,275 at the market open in New York Tuesday.

Alphabet reported two different profit figures to account for a record US$5 billion fine Europe imposed last week for violating competition law with Google's Android mobile software.

In a statement, Ruth Porat, chief financial officer of Alphabet and Google, said the company had delivered "another quarter of very strong performance". Google plans to contest the ruling. "Our investments are driving great experiences for users, strong results for advertisers, and new business opportunities for Google and Alphabet". Some analysts excluded other items as well, and Alphabet also beat that consensus of $9.59. Other revenue, which includes its cloud business and hardware, was $4.4 billion.

Alphabet's "other bets" saw a 49% jump in revenues from a year ago but they still lost money, with an operating loss of $732 million in the past quarter.

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