Tech giant Google’s shares slumped below the $1,000 mark in after-hours trading as its parent company took a major hit on profits due to a record £2.1billion EU fine.
Shares sank almost 3 per cent toaround $970 after the market closed when Google’s parent company Alphabet published its results in San Francisco. It said revenues were up 21 per cent but profits fell 28 per cent to £2.7billion, or $5.01 per share.
Google was fined the record sum by EU antitrust regulators last month for skewing search results in favour of its own shopping service.
Without the fine, Alphabetsaid earnings per share would have increased by 5 per cent.
Google was fined £2.1bn the record sum by EU antitrust regulators last month for skewing search results in favour of its own shopping service
In its second-quarter results posted as US markets closed last night, Alphabet said revenue rose from £16.5billion during the same period last year to £19billion.
It has been helped by rapidly expanding mobile phone and YouTube advertising. Google advertising revenues rose to £17billion compared to £15billion during the same period last year.
Ruth Porat, chief financial officer, said: ‘With revenues up 21 per cent versus the second quarterof 2016 and 23 per cent on a constant currency basis, we’re delivering strong growth with great underlying momentum, while continuing to make focused investments in new revenue streams.’
All eyes are on the US this week with Alphabet’s results due to be followed by fellow tech giants Amazon and Facebook – which have a combined market cap of $1.65trillion.
Any signs of a slowdown in growth could spook the market and send shares tumbling.
Tech is the best performing sector on the S&p 500 stock index, despite worries about over stretched valuations.
YouTube, which Google bought in 2006, now has 1.65billion users. Google and its fierce rival Facebook accounted for 99 per cent ofall growth in the US advertisingmarket last year.
It comes as Google is under growing pressure to crack down on extremist material published online, following terror attacksin the UK and France.
Internet firms could face multi-million pound fines if they fail to take down extremist material.
Yesterday Alphabet appointed the head of Google, Sundar Pichai, 45, to its board, where he will sit alongside founders Larry Page and Sergey Brin.
He ‘helped lead the development of key consumer products which are now used by over a billion people,’ bosses said.