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Technology

Google accidentally posts earnings results early, misses on revenue

By Hayley Tsukayama,October 18, 2012

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Google accidentally released its third-quarter earnings early Thursday, reporting a surprising 20 percent drop in profit.

The tech giant’s share price fell 9 percent to $687.39 a share minutes after the premature release, prompting Nasdaq to halt the stock’s trading .

The earnings release was inadvertently posted to the Securities and Exchange Commission Web site hours earlier than expected by its financial printer, the company said. The accident was apparent from a note included in the release that said it is “Pending Larry quote,” likely a reference to Google chief executive officer Larry Page.

The release was posted by RR Donnelley “without authorization,” the company said in a statement. “We have ceased trading on NASDAQ while we work to finalize the document.”

The company was scheduled to release the earnings report after the markets closed Thursday afternoon.

Google reported revenue of $11.3 billion during the third quarter, up 19 percent compared to the same period last year. But that was lower than analysts expectations of $11.8 billion. Net income fell to $2.18 billion.

The decline, Google said, can be partly blamed on foreign currency exchange rates. Had “foreign exchange rates remained constant from the third quarter of 2011 through the third quarter of 2012, our Google revenues in the third quarter of 2012 would have been $557 million higher,” the company said in the release.

Google also lowered what it charges advertisers every time a user clicks on an ad by 15 percent compared with the same period last year, but that was offset by an 33 percent increase in user clicks. Ad revenue, overall, grew 16 percent.

Google’s Motorola unit also hampered the company’s profits. The unit, which makes cellphones and mobile devices, reported an adjusted operating loss of $151 million during the quarter. Google acquired Motorola Mobility for $12.5 billion in May.

Motorola will continue to be a “big negative” for the company as it continues to reduce staff and close offices, said Colin Gillis, an analyst for BCG Partners. “This equation is not going to change any time soon.”

This comes as Google attempts to adjust to a rapid industry shift away from desktop and toward mobile devices like cellphones and tablets. The internet search firm has moved into hardware, producing a small tablet called the Nexus 7. It is expected to release another phone and tablet under its Nexus brand name later this year.