Alphabet reported a 21 per cent jump in quarterly revenue, maintaining a growth rate that is rarely seen among companies its size and suggesting the big sales gains enjoyed recently by the other internet firms are not done yet.
Alphabet, the owner of Google and YouTube, said it made US$3.5 billion in net income on sales of $26bn. The profit would have been much larger but for a record $2.7bn European Union anti-trust fine.
Still, the company noted that costs were rising faster than sales and warned that expenses would remain high as more searches shift to mobile devices.
The squeeze on expected future profit appeared to weigh on Alphabet's share price, which fell about 3 pe rcent to $967 after the bell. Shares had closed up in regular trading and have gained 26 per cent for the year.
Alphabet's cost of revenue, a measure of how much money the company must spend to keep its platforms running before added costs such as research, rose 28 per cent, well above the growth in revenue itself.
The rising costs, including what Google pays to drive traffic to its search engine, hurt operating margins more than most people had expected, said Doug Kass, the president of Seabreeze Partners Management.
"This could be problematic going forward," Mr Kass said.
The Alphabet chief financial officer Ruth Porat, asked about margins during a conference call with analysts, said the company was focused on getting bigger.
"As we've often said, we're focused on revenue and operating income dollar growth and not on operating margins," she said.
Increasing costs, Ms Porat added, are a result of more money going into high-growth products that she said would create value for shareholders.
With its latest profits, Alphabet reported $15.7 billion in cash and cash equivalents, and another $79 billion in marketable securities.
Alphabet and social media rival Facebook, which together dominate the online ad market, compete for advertising dollars.
This year, Google is expected to have $73.75bn in net digital ad revenue worldwide while Facebook is expected to take in $36.29bn, according to the research firm eMarketer. Together they will have about 49 percent of the market, eMarketer said.
Facebook is due to report earnings on Wednesday.
The technology sector has led a big rally in US stocks. The S&P 500 information technology index is up 23.1 per cent this year, compared with a 10.4 per cent rise in the S&P 500.
Anti-trust risk has shadowed Google for years, and anti-trust enforcers in the European Union last month fined Google $2.7bn for favouring its own shopping service.
The fine came in the first of three EU probes of Google's dominance in searches and smartphone operating systems, and analysts are going to monitor the downside closely, said Josh Olson, an analyst with Edward Jones.
"It is not so much the money or the fine itself," Mr Olson said, but "questions linger about what impact that could have on Google's Europe business, and they did not really comment on that."
US anti-trust enforcers thus far have chosen not to follow Europe's lead.
If not for the fine, Alphabet said that earnings per share would have been $8.90 in the second quarter, compared with $7 a year earlier. With the fine, Alphabet reported earnings per share of $5.01, beating an average estimate of $4.49.
Sundar Pichai, the chief executive of Google, said Google would fight to continue bundling its Android operating system with popular smartphone apps such as Google Maps - a practice the EU anti-trust officials are investigating.
"It's a very open market, open ecosystem, and it works well for everyone, and I expect that to continue," Mr Pichai said, adding that billions of people use Google products.
He was also appointed to the Alphabetboard of directors.
Google's ad revenue rose 18.4 percent to $22.67bn.
Revenue from other Google products, a category that includes the Pixel smartphone, the Play Store and Google's cloud business, rose 42.3 per cent to $3.09bn. Alphabet competes heavily in the fast-growing cloud business with tech companies Amazon.com and Microsoft.
Losses from other Alphabet units - an array of businesses known as "other bets" that includes the Waymo self-driving car company, the thermostat-maker Nest and the life sciences firm Verily - narrowed to $772 million from $855 a year earlier.
Reuters
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
The Bio
Name: Lynn Davison
Profession: History teacher at Al Yasmina Academy, Abu Dhabi
Children: She has one son, Casey, 28
Hometown: Pontefract, West Yorkshire in the UK
Favourite book: The Alchemist by Paulo Coelho
Favourite Author: CJ Sansom
Favourite holiday destination: Bali
Favourite food: A Sunday roast
What is Bitcoin?
Bitcoin is the most popular virtual currency in the world. It was created in 2009 as a new way of paying for things that would not be subject to central banks that are capable of devaluing currency. A Bitcoin itself is essentially a line of computer code. It's signed digitally when it goes from one owner to another. There are sustainability concerns around the cryptocurrency, which stem from the process of "mining" that is central to its existence.
The "miners" use computers to make complex calculations that verify transactions in Bitcoin. This uses a tremendous amount of energy via computers and server farms all over the world, which has given rise to concerns about the amount of fossil fuel-dependent electricity used to power the computers.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
THE BIO
Favourite book: ‘Purpose Driven Life’ by Rick Warren
Favourite travel destination: Switzerland
Hobbies: Travelling and following motivational speeches and speakers
Favourite place in UAE: Dubai Museum
What is dialysis?
Dialysis is a way of cleaning your blood when your kidneys fail and can no longer do the job.
It gets rid of your body's wastes, extra salt and water, and helps to control your blood pressure. The main cause of kidney failure is diabetes and hypertension.
There are two kinds of dialysis — haemodialysis and peritoneal.
In haemodialysis, blood is pumped out of your body to an artificial kidney machine that filter your blood and returns it to your body by tubes.
In peritoneal dialysis, the inside lining of your own belly acts as a natural filter. Wastes are taken out by means of a cleansing fluid which is washed in and out of your belly in cycles.
It isn’t an option for everyone but if eligible, can be done at home by the patient or caregiver. This, as opposed to home haemodialysis, is covered by insurance in the UAE.
England squads for Test and T20 series against New Zealand
Test squad: Joe Root (capt), Jofra Archer, Stuart Broad, Rory Burns, Jos Buttler, Zak Crawley, Sam Curran, Joe Denly, Jack Leach, Saqib Mahmood, Matthew Parkinson, Ollie Pope, Dominic Sibley, Ben Stokes, Chris Woakes
T20 squad: Eoin Morgan (capt), Jonny Bairstow, Tom Banton, Sam Billings, Pat Brown, Sam Curran, Tom Curran, Joe Denly, Lewis Gregory, Chris Jordan, Saqib Mahmood, Dawid Malan, Matt Parkinson, Adil Rashid, James Vince
The stats
Ship name: MSC Bellissima
Ship class: Meraviglia Class
Delivery date: February 27, 2019
Gross tonnage: 171,598 GT
Passenger capacity: 5,686
Crew members: 1,536
Number of cabins: 2,217
Length: 315.3 metres
Maximum speed: 22.7 knots (42kph)
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
ESSENTIALS
The flights
Emirates, Etihad and Swiss fly direct from the UAE to Zurich from Dh2,855 return, including taxes.
The chalet
Chalet N is currently open in winter only, between now and April 21. During the ski season, starting on December 11, a week’s rental costs from €210,000 (Dh898,431) per week for the whole property, which has 22 beds in total, across six suites, three double rooms and a children’s suite. The price includes all scheduled meals, a week’s ski pass, Wi-Fi, parking, transfers between Munich, Innsbruck or Zurich airports and one 50-minute massage per person. Private ski lessons cost from €360 (Dh1,541) per day. Halal food is available on request.
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Du Football Champions
The fourth season of du Football Champions was launched at Gitex on Wednesday alongside the Middle East’s first sports-tech scouting platform.“du Talents”, which enables aspiring footballers to upload their profiles and highlights reels and communicate directly with coaches, is designed to extend the reach of the programme, which has already attracted more than 21,500 players in its first three years.
How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
More from Neighbourhood Watch:
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Drivers’ championship standings after Singapore:
1. Lewis Hamilton, Mercedes - 263
2. Sebastian Vettel, Ferrari - 235
3. Valtteri Bottas, Mercedes - 212
4. Daniel Ricciardo, Red Bull - 162
5. Kimi Raikkonen, Ferrari - 138
6. Sergio Perez, Force India - 68
MOTHER%20OF%20STRANGERS
%3Cp%3EAuthor%3A%20Suad%20Amiry%3Cbr%3EPublisher%3A%20Pantheon%3C%2Fp%3E%0A%3Cp%3EPages%3A%20304%3Cbr%3EAvailable%3A%20Now%3C%2Fp%3E%0A
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3ESmartCrowd%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%0D%3Cbr%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3ESiddiq%20Farid%20and%20Musfique%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%20%2F%20PropTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3E%24650%2C000%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2035%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3ESeries%20A%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EVarious%20institutional%20investors%20and%20notable%20angel%20investors%20(500%20MENA%2C%20Shurooq%2C%20Mada%2C%20Seedstar%2C%20Tricap)%3C%2Fp%3E%0A
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
MATCH INFO
FA Cup final
Chelsea 1
Hazard (22' pen)
Manchester United 0
Man of the match: Eden Hazard (Chelsea)
