Alphabet Inc Makes Huge Net Income Gains In Q2 2019, Beats Analysts


Google's parent company Alphabet Inc has just announced its earnings results for the second quarter of the fiscal year 2019. Alphabet (NASDAQ:GOOG) reported $36.339 Billion revenues last quarter, and this has increased to $38.9 billion this quarter. Net Income for Alphabet Inc is $9.9 Billion in 2Q19, with an Earnings Per Share of $14.11. This beats analyst estimates massively, with these estimates ranging from $11.10 to $11.90. Take a look below for more details.

Alphabet Inc Reports $38.9 Billion In Revenue And $9.9 Billion In Net Income For Its Second Fiscal Quarter

After having battled with the European Commission's fines for a couple of quarters, Alphabet Inc has finally recovered. Google's holding company took an approximate $2 billion hit from this fine in its Q1, 2019. This quarter, Alphabet (NASDAQ:GOOG) reports Net Income of $9.9 Billion, which is a 3.29% QoQ (Quarter-over-Quarter) and a 3x YoY (Year-over-Year) increase.

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As Google's a significant contributor to Alphabet Inc's revenues, it's important to start from the search engine giant's financials every quarter. Google posted a $30 Billion advertising revenue last quarter and $26.6 billion in advertising revenues in the second quarter of 2018. In its 2Q19, the company reports $32.6 Billion advertising revenue, which marks for a 22.5% YoY and 6% QoQ increase.

Google's Traffic Acquisition Costs, which are the costs to the company pays to its partners in order to display Google's advertisements on their properties. TAC for Google's 1Q19 was $3.48, and in its second quarter, this has increased to $7.2 Billion. The increase is a result of Google's shift to mobile, which has higher traffic acquisition costs believes the company's CFO Ruth Porat.

Google (NASDAQ:GOOG)'s Other Bets is once again in loss, as the company continues to expand its presence in the self-driving car market. Other Bets' Revenues for the second quarter are $162 million, down from $170 million the previous quarter. For its latest quarter, Google reports a $982 million loss for Other Bets. This loss has increased from the $862 loss that Other Bets posted last quarter. Ms. Porat believes that Other Bets will benefit Google in the long run, but we're uncertain about the time frame that she has in mind.

Alphabet also announced a $25 billion Class-C share repurchase this quarter. IT continues to make high capital expenditures, and the majority of its 4,187 new hires belong to the cloud computing sector. The repurchase program is an effective use of capital believes Google and Alphabet's CFO. She also highlighted that Google's removal of Youtube content does not affect the video streaming site's revenues.

"With revenues of $38.9 billion, up 19% versus the second quarter of 2018 and up 22% on a constant currency basis, we’re delivering strong growth," said Ruth Porat, Chief Financial Officer of Alphabet (NASDAQ:GOOG) and Google. "Our ongoing investments in compute capabilities and engineering talent reflect the compelling opportunities we see across the company."

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Q2Revenue ($Billions):Net Income ($Billions):TAC ($Billions):TAC/AR
QoQRevenue ($Billions):NI ($Billions):TAC ($Billions):TAC/AR
Analyst Estimates ($)Revenue (Billion)EPS
Refinitv 38.211.30
Wall Street JournalN/A11.10
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