Alphabet shares hit as Q1 profits below expectations

Google parent company Alphabet Inc said first quarter revenues jumped 17% to $20.3bn although losses at its “other bets” division widened to $802m from $633m.

Profits increased to $4.2bn from $3.5bn as mobile advertising strengthened, but the results were still below market expectations, which prompted a sell-off on Wall Street with the shares down 6% in after hours trade.

The other bets unit generated revenues of $166m, more than double from the same period in 2015. The division works on ambitious projects such as driverless cars and its Calico healthcare business.

The company is also under pressure after the European Union on Wednesday accused Google of using its Android mobile-operating system to force phone makers and telecom companies into favoring its search engine and chrome browser on their devices.

Company finance officer Ruth Porta described the first three months as a “tremendous start to the year”.

“We’re thoughtfully pursuing big bets and building exciting new technologies, in Google and our Other Bets, that position us well for long term growth,” Porat said.