Alphabet, the parent company of Google, reported its earnings Monday afternoon for the second quarter and its stocks surged during afterhours trading thanks to its bottom line beating estimates handily.
Alphabet posted $11.75 in earnings per share versus an expected $9.59 per share. Revenue for the company during the quarter reached $32.65 billion versus an expected $32.17 billion.
On the news, Alphabet stock surged by over 5% and then fell back to a 3.2% increase following the earnings call of the company. Overall, solid growth in revenue was posted by the company, which helped to sooth fears about the new privacy regulations in Europe having an immediate impact, and Wall Street was pleased by slightly less spending to drive traffic to its ads and search engine than was expected.
While the adjusted earnings at Alphabet were solid, it posted $4.54 in non-adjusted earnings per share, due to the decision by the European Union to hit the company with an unprecedented fine of $5 billion related to its phone software.
As has been the case of recent, the advertising business of Google represented most of Alphabet’s revenue as it reached $28 billion during the three-month period, up nearly 24% year over year.
Other revenues, as they are called at Alphabet, which includes the hardware sales and cloud business, and is very important to company investors looking for the future of Google beyond its ads, reached $4.4 billion, equal to an increase of 36.5% year over year.
During the earnings call by the company, its CEO Sundar Pichai expressed that the cloud business enjoyed strong momentum, though he did not provide revenue numbers to help build on the per quarter revenue of $1 billion he announced during the final quarter of 2017.
Alphabet breaks out revenue and losses for the “Other Bets” longer term segment such as Verily its healthcare company, Fiber its internet service provider, and Waymo the autonomous driving business.
Other Bets had second quarter revenue of $145 million, which was up from the $97 million it earned during the same quarter one year ago.
Operating losses were broader as the company posted losses of $731 million compared to last year’s $633 million for the same period.
The traffic acquisition costs at Google which include money that it pays out to makers of phones, such as Apple, to use its services, reached $6.4 billion equal to 23% of advertising revenue.