Google Q3 profits slip, shares take sudden shock before earnings call
Two hours before its scheduled quarterly meeting with investors, search giant Google preemptively released its third-quarter 2012 earnings results on Thursday, showing a 20 percent decline in profit for the quarter and falling short of Wall Street expectations.
The company's shares dropped approximately 10 percent following the accidental release of the statement, but trading was halted shortly thereafter.
Google blamed financial printer RR Donnelley for the mistake:
"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."
According to the statement, the company's revenue continued its steady increase to $11.33 billion, but net income fell to $3.01 billion, and profit fell to 2.18 billion, or $6.53 per share.
This decline in income and profit is attributed to several losing factors for Google. One of these is the persistent weakness of the online advertising dollar. The average cost per click advertisers pay suffered a 15 percent decrease against last year, and a three percent sequential decrease.
Another problematic drag on Google's earnings came from the still-new Motorola hardware division, which experienced a $527 million operating loss in the third quarter. Motorola took in $2.58 billion in revenue, contributing a significant 22.7 percent of Google's overall revenue. Motorola remains a costly investment for Google, however. Though it made major cutbacks two months ago, reducing Motorola's staff by 20 percent, Motorola hasn't yet returned to profitability.
Motorola, for those keeping track, has lost money in fifteen of the last seventeen quarters.
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