EU fine on Google weighs on parent Alphabet profits

Google parent Alphabet reported that profit in the first three months of 2019 sagged under the weight of a hefty antitrust fine in the European Union.

Alphabet said that profit in the first-quarter fell 29 per cent to USD 6.7 billion on revenue that climbed 17 per cent to USD 36.3 billion.

The earnings took a hit from a European Commission fine that amounted to USD 1.7 billion at the end of March, according to the quarterly update.

Google shares were down 6.1 per cent to USD 1,208.50 in after-market trades that followed release of the earnings report.

Although profits excluding the one-time costs were better than expected, revenue growth was below forecasts for the technology colossus which is the dominant internet search company and operator of the ubiquitous Android mobile operating system.

Chief financial officer Ruth Porat said in the release the results showed 'robust growth' led by mobile search, ad revenues from YouTube videos and cloud computing.

"We remain focused on, and excited by, the significant growth opportunities across our businesses," she said.

Google's lucrative advertising platform remained the largest revenue driver for Alphabet, delivering more than USD 30 billion of revenues, but costs rose sharply as well.

The California giant showed widening losses for its "other bets" including the Waymo self-driving car project, Verily life sciences and services for internet for remote parts of the world and drone delivery.

'Other bets' showed an operating loss of USD 858 million, up from USD 571 million a year ago while revenues rose modestly to USD 170 million.

(Agencies)