Google parent Alphabet Inc (NASDAQ:GOOG) is scheduled to release its second quarter earnings report after closing bell tonight, and solid results are generally expected.
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Alphabet reported a second quarter that continued tech’s hot streak today, handily beating Wall Street’s expectations and boosting its shares by as much as another 5%. The Company’s segments include Google and Other Bets.
Under Porat, Alphabet has pushed for more financial discipline. In total, Alphabet’s total revenue saw a 21 percent increase year over year.
The main driver for Google’s second-quarter revenue growth was mobile, the company said, specifically from mobile search.
Powered by Google, Alphabet earned $4.9 billion during the April-June quarter, a 24 percent increase from the same time previous year.
Within that, we’ll also receive updates on the sources of ad revenue. Cost per click was down 7% vs -6% expected, and paid clicks were up 29% year-over-year vs 27% expected.
Paid clicks on Google websites were up 37% year over year and up 9% sequentially.
Google ad revenues rose 19%, to $19.14 billion. It’s also a notable acceleration of growth rate from that year-ago quarter, when top line revenue grew 11%.
But as Porat explained earlier this year, “The majority of efforts within Other Bets are pre-revenue”. In the second quarter of 2015, the Other Bets lost $660 million, with revenue of $74 million. And as a group, they’ll nearly certainly remain unprofitable in Q2.
Alphabet Inc is a holding company.
Those mounting losses may put a dent in Alphabet’s pitch to Wall Street that it can be more responsible with its spending. But regardless, and given its stubborn long-term focus, I suspect Alphabet won’t go out of its way to appease the market’s short-term demands.
They include self-driving cars, “Google Glass” smart spectacles, internet balloons, drones, health care and Google TV – none of which have become a major revenue source.
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In other words, the situations and challenges both companies face as the two biggest technology companies in the world aren’t all that different. Steve Symington has no position in any stocks mentioned. Nicolet Bankshares Inc. raised its position in shares of Alphabet by 0.3% in the first quarter. Try any of our Foolish newsletter services free for 30 days.
