Shares of Google plunged after the company's third-quarter results missed expectations of strong growth, and inadvertently were released well before the market's close.
Does Google's notable revenue and earnings miss spell trouble for the tech sector? Is this a buying opportunity in Google shares? Ken Sena, Evercore managing director, joins The News Hub to discuss. Photo: REUTERS.
Among the litany of issues, the Internet search giant's profits slid 20% from a year earlier to $2.18 billion, or $6.53 a share. Revenue rose 45% to $14.1 billion, thanks to the incorporation of Google's new Motorola hardware unit.
But revenue excluding Motorola slowed for the fourth consecutive quarter, dipping to a growth rate of 19% from rates of more than 20% for the past few quarters. At the same time, Motorola also revealed a bigger-than-expected operating loss.
The weak results, coupled with their unexpectedly early release from financial printer R.R. Donnelley RRD -2.56% & Sons Co., wiped $22 billion off Google's market capitalization halfway through the day. Google's shares halted trading for a time before resuming.
Google shares tumbled after the company's Q3 earning slipped out prematurely. WSJ's John Letzing has details on Digits. Photo: Getty Images.
As of the 4 p.m. market close, the shares had recovered slightly to end at $695, down $60.49, or about 8% for the day.
Still, the stock drop was a reversal for Google, which had experienced a run-up in its shares in recent months. The company's market capitalization had recently pulled even with Microsoft Corp.MSFT +0.44% for the first time, fueled by perceived good news about its online-ad business and missteps from rivals such as Facebook Inc. FB +0.33%
At the crux of Google's profit slide was the... [continues]
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