Google Earnings, Revenue Miss Wall Street Forecasts
Google reported its quarterly earnings much earlier than expected Thursday, and the results missed analysts' expectations significantly.
After the earnings announcement, the company's shares fell 8 percent, closing at $695 a share. (Click here to get the latest quotes for Google.)
CEO Larry Page apologized on the company's earnings conference call and talked about the firm's "strong quarter."
Trading was halted shortly after the announcement at the company's request pending news. The company initially recovered some losses after resuming trading.
Following the earnings release surprise, Google issued a statement blaming its financial printer for the early release.
"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, " the company said.
A spokesman for RR Donnelley said: "We are fully engaged in an investigation to determine how this event took place and are pursuing our first obligation – which is to serve our valued customer."
Google posted third-quarter earnings excluding items of $9.03 per share, down from $9.72 a share in the year-earlier period.
Google, which has been struggling to turn around a loss-making Motorola Mobility it bought for $12.5 billion, reported that its net income fell to $3.01 billion, from $3.18 billion in the year-ago quarter.
"We had a strong quarter, " said Google CEO Larry Page in a statement released a couple hours after the company's third-quarter earnings were inadvertently released.
Revenue increased 51 percent to $11.33 billion from $7.51 billion a year ago.
In the release, the company said its average cost-per-click declined 15 percent compared to the third quarter a year ago.
"There's a feeling that September wasn't a great month generally for our clients or for markets — not just advertising. That has some knock-on to our industry and this might be a little of that, " Martin Sorrell, CEO of advertising company WPP, told CNBC in response to the disappointing Google earnings.
Colin Gillis, an analyst at BCG, said the company's stock had been "ripe for a pullback."
"Click prices declined for the fourth consecutive quarter after rising for eight consecutive quarters before then, " he said. "That's a negative. This is the mobile problem. "
Analysts had expected the company to report earnings excluding items of $10.65 a share on $11.86 billion in revenue, according to a consensus estimate from Thomson Reuters.
On Thursday, the company unveiled a $249 laptop that is built by Samsung Electronics and uses Google's Chrome operating system, The Wall Street Journal Reported.
The computer will be sold online at Amazon.com as well as other websites and 50 Best Buy retail stores.
The company was scheduled to report after the closing bell on Thursday and surprised investors with its early release. Google's early release included the phrase "Pending Larry Quote" suggesting that a remark from Page would be added later. Below is an except from the company's SEC filing for third-quarter results: