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Google shares dive after shock profit fall
Stocks drop nine per cent after third-quarter results revealing big drop in profits are released by mistake.
Last Modified: 19 Oct 2012 01:06

Internet giant Google has revealed a huge fall in profits after it released its third-quarter earnings report early, apparently by mistake.

Google said its financial printer RR Donnelley filed a draft of its third-quarter earnings statement without authorisation on Thursday morning.

The second paragraph of the press release merely read "Pending Larry quote," suggesting that space was reserved for comment from Larry Page, chief executive officer.

"We have ceased trading on NASDAQ while we work to finalise the document. Once it's finalised we will release our earnings, resume trading on NASDAQ and hold our earnings call as normal at 1:30 PM PT,", Google said in a statement.

The surprise announcement pushed Google shares down 9 per cent to $687.30 before trading was halted.

Trading resumed a few hours later on Thursday.

Third-quarter profits fell 20 per cent on a year earlier to $2.18bn, well beyond expectations.

Net revenue rose to $11.3bn from $7.5bn, but was still below forecasts. Revenue climbed 45 per cent from last year to $14.1bn.

Excluding compensation for websites that generate traffic for Google's ads, revenue was $11.33bn.

Analysts were expecting $11.5bn.

The strong dollar appeared to contribute to Google's miss.

The company said that if foreign exchange rates had been stable, its revenue would have been $136m higher.

Google, earlier this year had completed the purchase of the loss-making mobile phone maker Motorola Mobility for $12.5bn and has been struggling to turn the firm around.

Costs related to the acquisition - for employee stock compensation and restructuring charges - knocked Google's overall results.

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Source:
Agencies
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