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Jul 28, 2016

Alphabet revenue soars 21.3% on strong mobile ad sales, video content

Google

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Google-parent Alphabet Inc's revenue increased a bigger-than-expected 21.3 per cent in the second quarter, driven by strong advertising sales on mobile devices and for video content.

The company's shares surged more than 6 per cent in after hours trading, before easing to trade up about 3 per cent.

Alphabet's consolidated revenue rose to $21.50 billion in the three months ended June 30, from $17.73 billion a year earlier.

Analysts on an average were expecting revenue of $20.76 billion, according to Thomson Reuters I/B/E/S.

Google's ad revenue increased 19.5 per cent to $19.14 billion, while it notched an 29 per cent rise in paid clicks, where advertisers pay the company only if a user clicks on the ad.

Alphabet, which dominates the mobile ad market along with rival Facebook Inc, has been trying to beef up ad revenue from mobile and video businesses, both of which till last year were a little less profitable than its desktop business.

Revenue at Alphabet's Other Bets business rose 150 per cent to $185 million, while operating losses widened to $859 million.

The division includes broadband business Google Fiber, home automation products Nest, self-driving cars and X - the research facility that works on "moon shot" ventures.

Net income rose to $4.88 billion, or $7.00 per Class A and B common stock, from $3.93 billion, or $4.93 per share.

Excluding items, the company earned $8.42 per share, beating analysts average estimate of $8.04, according to Thomson Reuters I/B/E/S.