Google Shares Plummet With Mistaken Release of Financial Results
Google shocked the financial markets with the early release of its third-quarter earnings statement, which fell short of analyst estimates for revenue and profits. Google shares dropped 9% to $699 before the NASDAQ halted trading.
Google blamed the early release on its printer, RR Donnelley, which sent out a incomplete press release with the notation "PENDING LARRY QUOTE," referring to CEO Larry Page.
"Earlier this morning RR Donnelley, the financial printer, informed us that they had filed our draft 8K earnings statement without authorization," said Google spokeswoman Rachel Whetstone, in a statement. "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 Pacific Time ."
It was an extraordinary mistake, but Google won't be able to blame the weak financial results on the printer.
Profit excluding some items was $9.03 a share on revenue of $11.3 billion. Analysts on average had estimated profit of $10.65 a share on sales of $11.8 billion.
The average amount advertisers paid each time a user clicks on a search ad declined about 15% from a year earlier, and was 3%t less than the prior period.
The company is spending heavily to break into markets beyond search, such as display and mobile advertising. The company earlier this year spent $12.4 billion on Motorola Mobility Holdings, pushing it further into the hardware market and stepping up its rivalry with Apple.
"The core business itself is slowing down," said Colin Gillis, an analyst at BGC Partners LP.
~~ Bloomberg News contributing~~