Google has managed to stump the industry analysts and investors alike yesterday with a premature announcement of its third quarter earnings. Well, the bizarre move wiped off 9% off Google shares value in a matter of a few minutes.
Google posted a massive 20% decline in their net income to $2.18 billion and the net revenue of $11.3 billion failed to meet the expectations of the investors pegged at $11.9 billion. It earned $9.03 per share as opposed to the $10.65 estimated by the analysts.
Though the biggest misfire remains the premature filing by financial printers RR Donnelley before the markets closed for the day, which Google maintains was unauthorized. The mistake indeed proved very costly for the Mountain view, California based firm as it resulted in a brief halting of trading on its shares and shaving off an unprecedented 9% value its shares.
Well the goof up of the day forced Chief Executive Larry Page to get into damage control mode who tried his best with announcements like Google’s mobile business generating revenue at an annualized run rate of $8 billion. Though, Page acknowledged that mobile ad rates were lower than that of the ads on its standard website, but insisted that Google was well positioned to capitalize on increasing mobile usage.
Apparently the expensive $12.5 billion acquisition is still hurting Google as the Motorola Mobiles posted another loss this quarter at $527 million operating loss and registering $2.5 billion in revenues. This was even after Google had taken a plethora of measures to cut down on costs which included handing the pink slip to one-fifth of its work force.
Google now needs to bolster the confidence of their Motorola employees and encourage them to come up with better devices, now that they have decided to focus on a limited number of smartphones to be released in a year. We say, an exclusive Nexus smartphone won’t hurt either. 😉
