The shares of Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOG), the parent company of Google, traded near all-time high during the extended trading on Thursday after reporting its second quarter earnings that beat the estimates of Wall Street analysts.
Alphabet’s Class A shares (GOOGL) and Class C (GOOG) shares climbed more than 4% to $801.25 per share and $776 per share around 6:40 p.m. in New York.
Alphabet financial results
Alphabet reported adjusted earnings of $8.42 per share in the second quarter, up from $6.99 per share in the same period a year ago. Its revenue increased 21% to $21.5 billion from $17.7 billion.
Wall Street analysts expected Google’s parent company to deliver earnings of $8.04 per share on $20.76 billion in revenue based on data from Thomson Reuters.
Alphabet ended the quarter with $78.46 billion in cash, cash equivalents, and marketable securities. Its free cash flow was $6.99 billion.
In a statement, Alphabet CFO Ruth Porat, said, “Our terrific second quarter results, with 21% revenue growth year on year, and 25% on a constant currency basis reflect the successful investments we’ve made over many years in rapidly expanding areas such as mobile and video. We continue to invest responsibly in support of our many compelling opportunities.”
Alphabet’s revenue from Google was $21.31 billion. According to the company it generated $15.4 billion from Google websites and $3.74 billion from Google Network Member’s websites.
Its Google advertising revenues increased 19% from $16.02 billion to $19.14 billion and other revenues were $2.17 billion.
Its traffic acquisition costs (TAC) to Google Network Members increased to $2.62 billion and the TAC to distribution partners was $1.35 billion.
Alphabet’s revenues from Other Bets, which included projects such as Google Fiber, Nest, Calico, Verily, Google Ventures, and self-driving cars, were $185 million.
During the company’s conference call with investors, Porat said Alphabet is now testing its self-driving cars in Mountainview, California; Austin, Texas; Kirkland, Washington; and Phoenix, Arizona. According to her, the company’s self-driving tests already reached 1.6 million miles.
Porat also stated that their strategy for self-driving cars is different from other companies in the industry. She said, “We’re focused on fully autonomous cars because in early testing we saw the risk of depending on drivers to remain engaged once you give them the option to switch off. So we’ve invested a lot there. We’re testing extensively based on this approach.”
Aaron Kessler, senior vice president of equity research of Raymond James told CNBC that Alphabet’s financial results “assured investors” that it is growing at “very healthy growth rates.”