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Google shares plunge after surprise midday earnings announcement

October 18, 2012|By Jessica Guynn | This post has been updated. See the note below for details
  • Google shares plunged Thursday after the search giant unexpectedly released third-quarter earnings during midday trading.
Google shares plunged Thursday after the search giant unexpectedly released… (Clay McLachlan / Reuters )

SAN FRANCISCO -- In a surprise move, Google reported third-quarter earnings during midday trading that missed Wall Street expectations, causing the stock to plunge 9% before trading was halted.

The earnings report was expected after the closing bell Thursday.

[Updated, 10:20 a.m. Oct. 18: Google said in an emailed statement that the premature release was unplanned.

"Earlier this morning RR Donnelley, the financial printer, informed us that they had filed our draft 8K earnings statement without authorization," the statement said. "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 filing with the Securities and Exchange Commission said: "PENDING LARRY QUOTE."

The search giant reported earnings of $9.03 a share on net revenue of $11.3 billion. Analysts had projected earnings of $10.65 a share on sales of $11.9 billion.

The news grabbing the attention of investors: Motorola Mobility, which has sustained substantial losses, dragged down Google’s profit.

The unexpected release of third-quarter earnings shook up Wall Street, which was already jittery about Google’s results after the dramatic rise in the stock over the last three months.

Investors were worried the search giant’s advertising revenue growth would not justify the spike.

Joe Magyer, senior analyst with The Motley Fool, said Google’s miss wasn't as big as it looks.

He blamed the miss on foreign exchange swinging against Google in the quarter. "A Google price dive is a buying opportunity," he said.

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Follow me on Twitter @jguynn

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