Google Earnings: Analysis of Q2 Performance & Alphabet Stock

This article summarizes Google earnings for the second quarter of the company's fiscal year.

Alphabet (GOOG) Google's parent company, reported earnings after the market close today, July 24, 2017. According to data compiled from Bloomberg, Wall Street analysts were expecting GAAP EPS of $4.46 per share on revenue of $20.9 billion. Here is a high-level summary of Google's earnings from the Q2, 2017 report:

Google's Q2 GAAP EPS (Diluted Net Income per Share): $5.01 per share including EU fine

Google's Non-GAAP EPS (Adjusted Net Income Per Share): $8.90 per share excluding EU fine

Google's Revenue: $26 billion including the EU fine

In the company's quarterly report, the CFO made the following statement:

With revenues of $26 billion, up 21% versus the second quarter of 2016 and 23% on a constant currency basis, we're delivering strong growth with great underlying momentum, while continuing to make focused investments in new revenue streams. Ruth Porat, CFO of Alphabet

Effect of Fine by EU Officials on Google Earnings

Alphabet shareholders have had a tumultuous road this year. At the beginning of this year, big YouTube advertisers began pulling their advertisements from the popular video platform after discovering ads playing next to videos promoting hate and terror.

Then, last month, EU regulators fined Alphabet $2.7 billion (USD) after accusing the company of promoting its own shopping services over competitors in search results. Unfortunately for Google, the EU ruling opens the door to its competitors taking additional legal action over the allegations. Of course, Google is not the only American tech company to face such allegations by EU regulators. Nonetheless, this recent, record-breaking fine surely sets a precedent for tech companies going forward, and Alphabet shareholders should be concerned by such bold governmental pressures in the EU business environment.

Even with these issues taken into consideration, Google maintained significant growth in its operating performance compared to previous periods. All things considered, the stock appears fairly valued and we will retain from adding it to either our Bullish List or our Bearish List.

Eric Bruin

Eric Bruin

Founder. Kelley School of Business '17. Write about stocks and business news. Contact for business inquiries or to write articles for The Stock Trader Blog.

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