Alphabet profit slumps 27.7% on EC fine

Google's parent company, Alphabet, has reported a 27.7% year-on-year slump in net profit for the June quarter, dragged down by the impact of the record €2.42 billion ($3.56 billion) European Commission antitrust fine slapped on the company last month.

Net profit for the quarter fell to US$3.52 billion ($4.43 billion), despite a 21% increase in revenue to US$26.01 billion. Excluding the impact of the fine, net income would have grown 28.3% to US$6.26 billion.

Revenue from Google properties increased 19.6% to US$18.42 billion, with advertising revenue up 18.4% to US$22.67 billion.

But total traffic acquisition costs increased to US$5.09 billion from US$3.97 billion one year earlier, and to 22% of advertising revenues from 21% over the same period.

During the June quarter Alphabet also increased its headcount by nearly 9000 staff to 75,606, the company's financial results show.

In June, the European Commission fined Google €2.42 billion after finding that the company prioritised the display and ranking of shopping search results and ads to favour its own shopping service, in contravention of European antitrust law.

Alphabet changed the method it uses to report earnings in the first quarter to prioritise generally accepted accounting principles (GAAP) over the non-GAAP results it had favoured in the past, so this quarter's results may not be entirely comparable with the previous year's.

Image courtesy Alphabet

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