Children’s Blocks and Hasbro Inc. Scrabble Letters Spell Out the words “Google” and “Alphabet” (Photographer: Daniel Acker/Bloomberg)

Alphabet Says EU Antitrust Fine to Cut Profit by $2.74 Billion

(Bloomberg) -- Alphabet Inc. said late Friday that the European Commission’s recent antitrust fine will reduce second-quarter profit by about $2.74 billion.

The company plans to report the fine in a separate operating expense line on its income statement. It’s not tax deductible, so the charge will reduce Alphabet’s net income and earnings per share by the full $2.74 billion amount, it said in a statement.

Analysts expect Alphabet, the owner of Google, to report second-quarter net income of $5.78 billion, according to data compiled by Bloomberg.

Analysts dismissed the EU fine as a threat to Google’s stock position. However several raised concerns about the potential impact of any forced changes to Google’s shopping service, a growing revenue source. Google has 90 days to deliver a solution that appeases EU regulators or face further fines.