Alphabet reports solid Q2 earnings despite EC fine

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Google parent Alphabet Inc.is scheduled to announce second-quarter earnings after the market closes on Monday.

In the same quarter past year, Alphabet reported earnings of $8.90 per share, excluding a $2.7 billion regulatory fine the European Union imposed on the tech giant.

Alphabet's revenues in the quarter increased 26 percent to $32.7 billion as users clicked on more of the ads that Google serves atop its search results and before YouTube videos.

Alphabet shares have risen 15 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 5 percent.

Google said little about the fine, which regulators said is for anticompetitive behavior with its Android mobile operating system, in its earnings release. 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.

Google's results follow those of Microsoft, which reported a record quarter last Thursday, with a net income of $8.9 billion on revenues of $30.1 billion for the quarter ending June 30.

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Google has more than 95 percent of share of search in Europe, according to the European Commission's complaint against the company.

Business Insider has contacted Google for comment. Its effective tax rate reached 24 per cent, up from 19 per cent during the same period a year ago.

Profit dipped 9.3% to $3.2 billion in the second quarter after accounting for the European Union fines, the company said. In the final minutes of trading on Monday, shares hit $1,211, a climb of 22 percent in the last 12 months.

"It's like a delivery company having to pay for a parking ticket", Brian Wieser, a Pivotal Research analyst, said of the penalty, which Alphabet accounted for in the second quarter. "I'm confident that we can find a way to make sure Android is available at scale to users everywhere", he said. It is gaining ground on Amazon, the ecommerce giant that is the world's second... Google's Other revenues -which now includes the smart thermostat business Nest - were $4.23 billion.

Google Chief Executive Sundar Pichai told analysts that investments in artificial intelligence software meant to better predict where to place ads are making its services more attractive to advertisers.

Also delighting Wall Street, Alphabet has apparently lowered the expenses in the non-Google businesses in its portfolio.

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