Categories: BusinessFront Page

Google shares suspended for more than 2 hours after 20% drop in profits accidentally revealed early

Google shares’ trading was suspended for two-and-a-half hours after the internet giant released its third-quarter results early by mistake.

Its quarterly profits fell 20% from a year earlier to $2.18 billion – below analysts’ expectations.

Google blamed financial printing firm RR Donnelley for filing an early draft of the results, which had been expected after the closing bell.

Shares in Google were down 9% when trading in the stock was suspended.

When trading resumed, the shares recovered slightly to end the day 8% lower.

Google chief executive Larry Page apologized to analysts on a conference call after the market closed.

“I’m sorry for the scramble earlier today,” he said, adding that the company had had a strong quarter.

In a statement after the inadvertent release, Google said: “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 PST.”

Google chief executive Larry Page apologized to analysts on a conference call after the market closed

The company’s draft results statement, filed with the Securities and Exchange Commission, was published at 09:30 Pacific time (16:30 GMT), three-and-a-half hours ahead of schedule.

It says “PENDING LARRY QUOTE” at the beginning, referring to chief executive Larry Page and indicating that it was not ready for publication.

Its final results statement, published at 12:00 Pacific time (19:00 GMT), included the following quotation from Larry Page: “We had a strong quarter. Revenue was up 45% year-on-year, and, at just fourteen years old, we cleared our first $14 billion revenue quarter.

“I am also really excited about the progress we’re making creating a beautifully simple, intuitive Google experience across all devices.”

Net revenue rose to $11.3 billion from $7.5 billion, but was still below forecasts.

Including websites that generate traffic for Google’s ads, revenue rose 45% to $14.1 billion.

The slide in Google’s share price took the company’s market value back down below that of Microsoft, which it had overtaken earlier this month.

Joe Saluzzi from Themis Trading said: “You can’t make those mistakes any more.”

He added: “Mistake or not, the earnings are earnings. The problem is when this happens in the middle of the day, there is no time for a conference call to massage it, there is no time for analysts’ questions and for an evaluation.”

Google completed the purchase of the loss-making mobile phone maker Motorola Mobility for $12.5 billion earlier this year and has been struggling to turn the firm around.

Costs related to the acquisition – for employee stock compensation and restructuring charges – knocked Google’s overall results, as did the strong dollar.

The company said that if foreign exchange rates had been unchanged, its revenue would have been $136 million higher.

 

Clyde K. Valle

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.

Recent Posts

Donald Trump and Elon Musk Celebrate Election Victory at UFC 309

Image source: Wikimedia Commons President-elect Donald Trump celebrated his election victory at the Ultimate Fighting…

5 days ago

White House 2024: Donald Trump Wins, Kamala Harris Calls Him to Concede Election

Millions of voters across the US chose to return Donald Trump to the White House…

2 weeks ago

Who Won? Donald Trump Declares Victory as He Addresses Jubilant Supporters in Florida

Donald Trump declares victory in the US election as he addresses jubilant supporters in Florida.…

2 weeks ago

Stocks Soaring as Donald Trump Closes in on US Victory

Stocks around the world are rising as Donald Trump appears to be on the cusp…

2 weeks ago

Who Won? Kamala Harris Cancels Election Night Party as Path to Victory Narrows

Donald Trump has won Pennsylvania, North Carolina and Georgia and taken a lead over Kamala…

2 weeks ago

Quincy Jones Dead at 91

Quincy Jones, the celebrated musician and producer who worked with Michael Jackson, Frank Sinatra, Ray…

2 weeks ago