By Paresh Dave
Feb 2 (Reuters) - Alphabet Inc, Google's parent company, reported a better-than-expected quarterly profit on Thursday as its biggest bets showed signs of progress, including driverless cars and faster cloud-computing services.
Shares rose about 5% in after-hours trading.
The world's biggest internet search company reported $2.23 billion in net income, compared with a year-ago loss of $3.92 billion, due to changes in the timing of expenses and income related to a European Commission penalty and other factors. Excluding one-time items, the profit of $12.77 per share was more than analysts had forecast, according to IBES data from Refinitiv.
Revenue climbed 21% to $46.08 billion, helped by robust online advertising growth and increased usage of Google's services during the coronavirus pandemic.
Alphabet Chief Financial Officer Ruth Porat told analysts on a conference call that advertising demand remained strong, and that YouTube revenue climbed about 46% year-over-year. She also said that the company is hiring staff and that employee benefits expenses rose "quite meaningfully."
"As the pandemic persists, we are maintaining heightened investments to strengthen the infrastructure and capabilities critical to our future," she said.
While Google advertising continues to power growth, the company's "other bets" - its collection of mostly hardware- and internet-infrastructure projects not related to search - lost $1.2 billion in the latest period, compared with a year-ago loss of $1.1 billion.
"Other bets delivered another quarterly loss," Porat said. "But remember these bets are for technology that in many cases is still nascent and many years from generating material revenue."
Porat said the Waymo autonomous ride-hailing subsidiary made improvements to its technology and "significantly" increased the range of scenarios it can safely navigate.
Alphabet's cloud-computing business also continues to grow rapidly. Google Cloud revenue rose about 45% to $5.54 billion, narrowing its gap with Amazon.com Inc's market-leading cloud business.
Porat called Google Cloud a "long-term growth driver."
(With additional reporting by Sheila Dang and Stephen Nellis; Writing by Stephen Nellis; Editing by Diane Craft and Sonya Hepinstall)
