Google earnings blunder costs it dearly – share trading suspended

19 Oct 20121 Share

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Google CEO Larry Page

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

The accidental leakage of Google’s third-quarter results which revealed GAAP operating income fell sharply in the quarter has resulted in shares in the company falling 13pc in value despite the company surpassing US$14bn in revenues for the first time. The company has temporarily suspended share trading.

It is understood that financial printer RR Donnelly accidentally released the financial results ahead of schedule.

During the quarter, Google reported revenues of US$14bn and earnings per share of US$6.53.

“GAAP (generally accepted accounting principles) operating income in the third quarter of 2012 was US$2.74bn, or 19pc of revenues. This compares to GAAP operating income of US$3.06bn, or 31pc of revenues, in the third quarter of 2011. Non-GAAP operating income in the third quarter of 2012 was US$3.80bn, or 27pc of revenues. This compares to non-GAAP operating income of US$3.63bn, or 37pc of revenues, in the third quarter of 2011.

“GAAP net income in the third quarter of 2012 was US$2.18bn, compared to US$2.73bn in the third quarter of 2011.”

The decline in profits was due to a number of factors, the most prominent being Google’s acquisition of Motorola’s mobile division for US$12bn. Motorola reported an operating loss during the quarter of some US$527m in the third quarter.

Google’s advertising division reported revenues of US$11.53bn. Google-owned sites generated revenues of US$7.73bn while partner sites generated revenues of US$3.13bn.

“We had a strong quarter,” said CEO Larry Page. “Revenue was up 45pc year-on-year, and, at just 14 years old, we cleared our first US$14bn revenue quarter.”

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

66

DAYS

4

HOURS

26

MINUTES

Buy your tickets now!

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com