Google stocks slump despite record $14 billion quarter
Despite a big announcement around the corner and the critical acclaim its Nexus 7 tablet has received Google had a shock yesterday when its shares actually dropped
Android 4.0 ICS:
Google have posted a record breaking quarter with revenues of $14.10 billion but an embarrassing leak of the results early in the day whilst the stock market was still open resulted in a sharp decrease in value of shares because the results didn’t meet expectations.
Google blamed financial printer PR Donnelley for the mistake which capped an embarrassing day for it as YouTube went offline and the release of Google’s new Samsung Chromebook was leaked early.
The SEC document, which is provided to the stock market and investors was leaked so early that it lacked any comment from Google on the results and had a placeholder marked “PENDING LARRY QUOTE” referring to Larry Page, CEO of Google.
The document showed Google reporting $14.10 billion in revenue and EPS of $6.53, which missed most analyst predictions - they were expecting $14.7 billion in revenue. The stock quickly began to suffer; going down around 9% by the time trading was halted at 12:50 pm US Eastern time.
All in all revenues were reported as being up 45 percent compared with Q3 2011, but GAAP (generally accepted accounting principles) net income was down 20 percent year-over-year to $2.18 billion ($6.53 per share), as compared with $2.73 billion in Q3 2011 ($8.33 per share). The decline was due to rising costs.
In a statement following the leak Google's CEO Larry Page remained positive about Google's future saying,
"Now we took a big bet on Android back in 2005. We believed that aligning standards around an open source operating system would drive innovation across the industry. Most people thought we were nuts."
"Today there are over half a billion Android devices-half a billion - with 1.3 million more being activated every day. You should all run out and buy the Nexus 7 tablet for $199. It’s had rave reviews and recently won “Gadget of the Year” from T3, the gadget experts."
Motorola’s hardware business brought in $2.58 billion in revenue ($1.78 billion from mobile and $797 million from home). Its operating loss was $527 million. However, despite the loss from Motorola that extra revenue pushed Google over the $14 billion mark for the first time in 14 years.
Google are expected to announce new products on October 29th at their New York press event which will most likely involve a new flagship Nexus phone and high resolution retina-display style tablet