SAN FRANCISCO – US multinational Alphabet, the parent company of Google, announced on Thursday profits of $16.604 billion between January and June, a 31.82 percent increase over the same period last year.
Based in Mountain View, California, the firm had revenues of $75.283 billion during the first six months of 2019, 18% more than the $63.083 billion earned during that period in 2018, and stockholders received dividends of $23.91 per share, a significant hike over the $18.13 distributed to them a year ago.
The big jump in profits despite a more moderate increase in revenue can be explained by the fact that this year Alphabet has had to devote much less money to paying regulatory fines in Europe – “only” $1.697 billion – compared with the big penalty of $5.071 billion it had to budget for in 2018.
That $1.697 billion, a sanction imposed by the European Commission for violations in the online advertising area, was paid at the beginning of this year and had already been reflected in the firm’s results announced in April, although now the company has launched the appeals process.
Alphabet took advantage of the earnings announcement to say that its board of directors has authorized a buyback of its class C shares valued at $25 billion.
Google’s income continues to come mainly from advertising, which in the latest quarter totaled $32.601 billion, 83.71 percent of the total.
The remaining income comes mainly from its cloud platform services, Google Cloud, and from the sale of hardware devices, such as the Pixel telephone.
In terms of revenue, Alphabet beat analysts’ expectations and earnings per share, and announced even lower traffic acquisition costs (TAC) than analysts had expected.
CEO Sundar Pichai said in a statement that the firm’s efforts to build a more useful Google are providing the company with extensive opportunities to help users, partners and corporate customers.
He said he was enthused about improvements in the firm’s information products like its search engine, maps and its virtual assistant, as well as its groundbreaking work in artificial intelligence, the cloud and hardware.
Alphabet’s results were received well by investors on Wall Street on Thursday with the firm’s shares jumping 9.07 percent to $1,239.08 in after-hours trading on the New York market.