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

Fine will be reported in the second quarter, company says.



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

(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.

--With assistance from Mark Bergen

To contact the reporter on this story: Alistair Barr in San Francisco at abarr18@bloomberg.net.

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Emily Biuso, Andrew Pollack