Alphabet beat on earnings, but shares are down 3.04% in premarket trading as analysts were hoping for more.
The company reported earnings of $US5.01 per share on revenue of $US26.01 billion during the second quarter.
Ben Schachter, an analyst at Macquarie, told Business Insider‘s Steve Kovach, “I think people were hoping for a bigger beat on the top line, and we didn’t get that.”
Alphabet Chief Financial Officer Ruth Porat explained that the company was investing more heavily as new revenue streams take their time to ramp up.
Alphabet’s other bets brought in $US248 million in revenue but ultimately lost the company $US772 million. Other bets include Alphabet’s smaller companies like Nest, Waymo and Verily.
More searches are happening on mobile, which had an impact on the company’s top line. Revenue from mobile searches is shared with partners, making it less profitable than desktop searches.
Google was fined a record $US2.7 billion by the European Commission this quarter for what was deemed to be unfair search practices. The fine ate into Alphabet’s net income which came in at $US3.5 billion for the quarter, much lower than the $US4.9 billion in the same quarter last year.
Shares of Alphabet have been on a tear this year, gaining 19.91%.