Alphabet Inc (GOOGL.O) surpassed expectations for quarterly revenue and earnings on Monday, reporting higher advertising sales across its platforms and trying to move past a record US$2.7 billion European Union fine by taking the entire charge at once.

On a consolidated basis, revenue rose about 21 per cent to US$26.01 billion in the second quarter ended on June 30, beating the analysts' average estimate of US$25.65 billion, according to Thomson Reuters I/B/E/S.

Earnings per share was US$5.01, beating an average estimate of US$4.49, and would have been US$8.90 if not for the EU antitrust fine announced last month, Alphabet said. Earnings per share was US$7 in the second quarter of 2016.

But the company's shares, which closed up in regular trading on Monday, fell about three per cent to US$968 after the bell.

Shares of Alphabet, the owner of the Google search engine and the YouTube video service, had gained nearly 26 per cent this year through Monday's close.

"You're seeing some profit-taking after a pretty good run," FBN Securities analyst Shebly Seyrafi said in an interview.

One potential blemish in the earnings report was aggregate cost-per-click, which fell 23 per cent year-over-year, but the impact on Google's ad business was not immediately clear.

EU antitrust enforcers last month hit Google with a record 2.4-billion-euro (US$2.7-billion) fine for favouring its own shopping service, taking a tough line in the first of three probes of its dominance in searches and smartphone operating systems.

Alphabet said shortly after the EU announcement that the company would report the whole fine as an expense in the second quarter.

Revenue was boosted by robust demand for advertising on mobile and on YouTube.

Google's ad revenue, which accounts for a lion's share of its business, rose 18.4 per cent to US$22.67 billion.

The company faces intensifying competition from social media giant Facebook Inc for advertising dollars. The companies together dominate the online ad market.

This year, Google is expected to generate about US$73.75 billion in net digital ad revenue worldwide, a 17.8-per-cent jump from a year earlier, according to research firm eMarketer.

Paid clicks, where an advertiser pays only if a user clicks on ads, rose 52 per cent. Analysts on average had expected a rise of 35.2 per cent, according to data and analytics firm FactSet.

Paid clicks rose 44 per cent in the first quarter.

Revenue from its Google Other unit, which includes Pixel smartphone, Play Store and cloud business, rose 42.3 per cent to US$3.09 billion.

The company's net income fell to US$3.52 billion.

The company changed the method it reports earnings in the first quarter, focusing on Generally Accepted Accounting Principles (GAAP) earnings instead of non-GAAP results.