Google missed analyst expectations by a wide margin as profits fell from a year ago
Update, 12:42 PT
NASDAQ has resumed trading on Google's stock after halting it for a couple of hours earlier on Thursday. Google's stock fell sharply in the morning and early afternoon after its disappointing earnings were prematurely released.
Google's stock has since rebounded slightly, but it still closed down 8.01 percent ($60.49) on the day.
Google blamed financial printer R.R. Donnelly for releasing the report, which showed a decrease in profits and weak advertising figures.
The initial report was clearly not ready because it included the phrase "Pending Larry Quote," in reference to CEO Larry Page.
Page's statement is now included, and reads as follows:
"We had a strong quarter. Revenue was up 45 percent year-on-year, and, at just fourteen years old, we cleared our first $14 billion revenue quarter. I am also really excited about the progress we’re making creating a beautifully simple, intuitive Google experience across all devices.”
Though revenue increased at the company, profits were down seven percent from a year ago. Earnings per share also missed analyst expectations by more than 15 percent.
Google stock dropped more than nine percent on Thursday after the company prematurely released its third quarter earnings, which revealed a dip in profits and continued declines in advertising prices.
NASDAQ has halted trading on the stock at Google's request, and the Silicon Valley giant has since blamed printer R.R. Donnelly for the mishap. (Stock drop below).
Google posted earnings of $9.03 a share, down seven percent from its third quarter of fiscal 2011, when it netted $9.72 earnings a share.
Net income was also down, from $3.18 billion to $3.01 billion.
Even more distressing for investors and analysts is that cost-per-click, the rate Google gets for each advertisement, dropped 15 percent compared to a year ago.
The drop in profit was unrelated to revenue, which increased 51 percent to $11.33 billion.
Moreover, Google’s performance fell well short of analyst expectations, which pegged the company at $10.65 a share and $11.86 billion in revenue.
Google has made a series of aggressive moves over the past few months, all dating back to its $12.5 billion acquisition of Motorola Mobility, which closed in May.
As a result, after a few months of stagnation, Google’s stock had been rising rapidly since July, hitting an all-time high. Thursday temporarily undid some of that growth.
It was not just the timing of the report’s release that indicated it had been issued early. The report included the phrase “Pending Larry Quote,” meaning that a statement from CEO Larry Page had yet to be added.
Here's Google's statement:
"Earlier this morning RR Donnelley, the financial printer, informed us that they had filed our draft 8K earnings statement without authorization. We have ceased trading on NASDAQ while we work to finalize the document. Once it's finalized we will release our earnings, resume trading on NASDAQ and hold our earnings call as normal at 1:30 PM PT."