Google parent Alphabet (NASDAQ: GOOG, GOOGL) on Monday reported better-than-expected Q2 2018 results that sent shares up nearly 5% in after-hours trading.
The US search giant, which just a week ago was hit with a record €4.34 billion ($5 billion) fine by the European Commission for allegedly abusing its Android market dominance, announced earnings-per-share (EPS) (adjusted) of $11.75 on revenue of $32.65 billion. According to a Thomson Reuters consensus estimate, Alphabet was expected to report EPS (adjusted) of $9.59 on revenue of $32.17 billion. In Q2 2017, Alphabet reported EPS of $8.90 on revenue of $26 billion. Needless to say, overall, the company, excluding the impact of the $5 billion European Commission charge which led to a non-adjusted EPS of $4.54 versus expectations for $9.66, posted solid revenue growth.
As usual, Google’s ad business accounted for most of its revenue, generating $28 billion, up nearly 24% on a year-over-year (y/y) basis. Other revenue, which includes its cloud business and hardware, was $4.4 billion, up from $3.2 billion last year, or 37.5%.
Ruth Porat, CFO at Alphabet and Google, commented:
“We delivered another quarter of very strong performance, with revenues of $32.7 billion, up 26% versus the second quarter of 2017 and 23% on a constant currency basis. Our investments are driving great experiences for users, strong results for advertisers, and new business opportunities for Google and Alphabet.”
Waymo, Google’s self-driving unit, could certainly be categorized as a new business opportunity for the Mountain View, Calif.-based company. The search giant’s self-driving arm has hit another milestone – logging 8 million miles driven in autonomous mode on public roads in 25 U.S. cities. That compares with 5 million in February. As Waymo approaches commercial service this year, Morgan Stanley (NYSE:MS) analysts see Alphabet and its divisions growing Google’s business to the $1 trillion mark. The company’s current market cap sits around $828 billion.
It goes without saying that Google with Alphabet’s assets that include Google Fiber, Google Play, DeepMind, X, Verily, venture capital units, and hardware units isn’t just a search engine anymore.
Alphabet shares today are up $42, or 3.42%, at $1,253 and change. Earlier in the session the name, which is up 19.5% this year, hit an all time high of $1,275.
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