Google's shares crash on poor Q3 figures

By John Leonard
18 Oct 2012 View Comments
bankrupt

Trading in Google shares was halted today on Nasdaq after poor earnings figures were released - apparently prematurely.

The search firm blamed financial print service provider RR Donnelley for releasing its quarterly earnings figures a few hours early. The results had not been expected until after the closing bell. RR Donnelley shares also fell 6 per cent on the news.

Further reading

Following the announcement, which gave earnings of $14.10bn (£8.74bn) in revenue, and earnings per share at $6.53 (£4.05), Google shares fell about 8 per cent almost immediately, declining to 13 per cent below their starting point shortly afterwards.

The release detailed Q3 earnings for 2012 at $2.74bn (£1.7bn), or 19 per cent of revenues, which compares unfavourably with a figure of $3.06bn (31 per cent of revenues), for Q3 2011.

Net income was also down around 20 per cent on a year-on-year basis, coming in at $2.18bn (£1.35bn) this quarter.

Analysts believe that the poor figures may be laid at the door of Motorola, now owned by Google, which reported an operating loss of $527m (£327m), it's Mobile Mobility division being responsible for the vast majority of that fall.

Google acquired the mobile phone company for $12.5bn (£7.7bn) in August 2011 as it looked to leverage Motorola's handset-making expertise for its Android platform, while also acquiring thousands of its patents. In August 2012 it was announced that 4,000 jobs would be lost at the phone maker.

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