Alphabet Inc. (NASDAQ: GOOGL) reported second-quarter 2016 results after markets closed Thursday. The search engine behemoth reported adjusted diluted earnings per share (EPS) of $8.42 on revenues of $21.5 billion. In the year-ago quarter Alphabet posted EPS of $6.99 on revenues of $17.73 billion. Analysts were estimating EPS of $8.04 on revenues of $20.76 billion.
The Google segment posted revenues of $21.32 billion, up from $17.65 billion a year ago. Operating income rose from $5.61 billion to $6.99 billion. The operating loss on other (Bets) revenues totaled $859 million, up from $660 million in the year ago quarter.
Revenues at Google websites rose 24% to $15.4 billion and Google Network revenues rose 3% to $3.74 billion. Ad revenues rose 19% to $19.14 billion.
Because Alphabet does not break out the source of advertising revenues, it’s a little hard to draw any conclusion other than a 19% jump is nice indeed. When Facebook reported results on Wednesday the social media giant posted ad revenues of $6.24 of which 84% came from mobile advertising. Alphabet does not appear to be having much luck there, but like we said, it’s hard to tell when comparing apples and oranges.
Traffic acquisition costs paid to Google Network members rose to 70% of Network revenues, or $2.62 billion. Payments to distribution partners totaled $1.35 billion, about 9% of websites revenues. Total traffic acquisition costs rose to $3.98 billion and were flat year over year as a percentage total ad revenues (21%).
Paid clicks on Google websites were up 37% year over year and up 9% sequentially. Paid clicks on the Network members sites were flat year over year and down 3% sequentially. Aggregate cost per click fell 7% compared with the year ago quarter and was down 1% sequentially.
Capital spending totaled $2.06 billion in the quarter, roughly flat with the year-ago total.
The company repurchased 2 million shares of its Class C common stock for $1.4 billion. Alphabet said it has now completed all authorized share buybacks under its current program.
Alphabet did not provide a forecast, but the consensus second quarter estimates call for EPS of $8.35 on revenues of $21.62 billion. For the full year analysts forecast EPS of $33.48 on revenues of $87.09 billion.
Shares traded up nearly 4% at $795.50 in after-hours trading. The 52-week range is $593.09 to $810.35, and shares closed Thursday at $765.84. Thomson Reuters reported a 12-month price target of $908.93 before the earnings report.
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