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RR Donnelley shares drop on premature SEC filing

Thursday, 18 Oct 2012 | 3:19 PM ET

TRENTON, N.J. -- Shares of RR Donnelley fell and then partially recovered Thursday amid news the printer and communications consultant had mistakenly filed a draft version of client Google Inc.'s third-quarter financial results to the Securities and Exchange Commission hours before the final version was to be submitted.

THE SPARK: Google, the Internet search engine company, blamed RR Donnelley for the mistake and had to temporarily halt trading of its own shares on Nasdaq while it worked on finalizing its earnings statement. Google shares had dropped by $68.19 each, or about 9 percent, by then, as the draft showed the company had missed Wall Street earnings-per-share expectations by a wide margin. The company still plans to hold its conference call with analysts to review the earnings report as previously scheduled, at 4:30 p.m. Eastern time, after the close of stock markets.

THE BIG PICTURE: Releasing a company's financial results prematurely, or submitting a version that isn't final and might be adjusted, can have a dramatic effect on that company's share price and market capitalization, as well as on investors' portfolios. Chicago-based RR Donnelley files reports to the SEC on behalf of many companies.

THE ANALYSIS: Donnelley spokesman Doug Fitzgerald said his company is still investigating "how this event took place" and is trying to help Google.

SHARE ACTION: Donnelley shares fell nearly 6 percent, from $10.83 to $10.23, in about 7 minutes after the error became known shortly after 1 p.m. Eastern time. They recovered most of that loss by mid-afternoon, and were trading at $10.73, down just 1.1 percent. Shares of the company have declined 27 percent in the year to date.

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