Google owner Alphabet saw profit drop during the second quarter due to a $2.7 billion fine levied by European antitrust regulators. Deltec Asset Management LLC boosted its position in shares of Alphabet by 2.8% in the second quarter. While the fine is included in "accrued expense and other current liabilities" on company's consolidated balance sheet, this could potentially open up the company to lawsuits in other regions. As a percent of Google ad revenues, total traffic acquisition costs amounted to 22%, a slight increase from the 21% recorded previous year. The company stated that revenue from advertising from all their regions around the world increased when compared with first-quarter a year ago.
Paid clicks on Google properties were up a whopping 61 percent year-over-year and 15 percent sequentially. The average cost-per-click was down 23% year over year.
On a consolidated basis, revenue rose about 21 percent to $26.01 billion (€22.34bn) in the quarter ended June 30th, beating the analysts' average estimate of $25.65 billion (€22.03bn), according to Thomson Reuters.
Furthermore, another reason for having an undesirable effect on the report was a whopping fine of $2.74 billion, that was charged European Union on Google, for antitrust violations.
The California-based company's shares, which closed marginally up in regular trading on Monday, fell almost 3 per cent to $969 after the bell.
"2Q TAC was ~6% (~$290mm) higher than expected driven by the strength of mobile search and GOOGL's programmatic business", they added. Another reason for the squeezed expected profits owes to the 3 percent fall in Alphabet's share price which came down to $967 after the bell.
Meanwhile, Alphabet's "other bets" division - which includes acquisitions like Nest and other longer-term projects being developed through its X lab - remains a small revenue driver and unprofitable business.
In addition to Google co-fonder Larry Page and Pichai, some of the other Alphabet board members include co-founder Sergey Brin, former CEO Eric Schmidt and Kleiner Perkins' John Doerr as well as Google SVP Diane Greene. Revenue grew 34 percent year over year to $248 million, while its operating loss declined 10 percent to $772 million.