An early and unexpected release of Google's earnings is weighing on the stock, and its shares are halted now, with CNBC's "Power Lunch" crew and CNBC's Jon Fortt. The company reported Q3 EPS at $9.03 versus a $10.65 estimate, and cost per click is down...
By CNBC.com staff and wire reports
Updated at 3:59 p.m. ET: It was the "oops" heard round the world. Google blamed an error by the financial printer that handles its quarterly earnings for an early release of the report that fell short of Wall Street expectations and slammed Google shares Thursday.
In a statement Google said its printer RR Donnelly had released a draft of the Internet giant's third quarter financial results without authorization and well before the scheduled release time after the market close.
"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.
Shares of Google, the world's No.1 Internet search engine, declined 9 percent to $687.30, a loss of about $19 billion in market capitalization,?before trading was halted by Nasdaq. After they resumed trading at 3:20 p.m. ET, they were down about 8.9 percent.
Donnelly said it is conducting an investigation to discover how the error?happened. Shares of Donnelly dropped too.
Reuters reported that the second page of the mistakenly-released report seemed to have a space reserved for a quote from CEO Larry Page: "Pending Larry quote."
"We had a strong quarter," Page said in a statement?on the company's website when the earnings were finally released.?
Google, which has been struggling to turn around a money-losing cell phone maker Motorola Mobility that it bought for $12.5 billion, reported a 20 percent dive in net income to $2.18 billion. Excluding certain items, it earned $9.03 a share, down from $9.72 in the third quarter last year and?vastly underperforming the $10.65 analysts had expected, on average.
Revenue rose to $11.33 billion, minus traffic acquisition costs, but also missed expectations.
The miss was a sign of one of Wall Street's major worries this earnings season: revenues are coming in lower than many had expected.
But company top lines?or the revenue generated that should be driving those bottom-line profit beats?have been even worse this quarter than they were last.
With about one-third of the companies on the Standard & Poor's 500 reporting so far, a healthy 65 percent have beaten the low bar set for profit expectations in the third quarter.
But while that has been happening, just 42 percent have topped revenue forecasts.
That is well below the historical average of 62 percent and even worse than the anemic second quarter, which saw a sales beat of just 44 percent. The market has flatlined so far during earnings.
Investors have shown a tendency as the economy works its way back from the financial crisis and ensuing recession that ended in 2009 to reward companies growing revenue and penalize those who fall short even if they beat on profit.
You can follow the action in Google's share price here.
CNBC senior writer Jeff Cox and?Reuters contributed to this report.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.