Google accidentally releases results early, stocks dive

Google today accidentally released its third quarter financial results, missing expectations and causing the US stocks to fall.

The internet giant says that its financial printers RR Donnelley filed a draft of its financial statement without its authorisation, leaving it scrambling to finalise the statement.

Google pulled in US$14.1-billion with a revenue of US$2.18-billion. That’s down from the US42.73-billiion it brought in during the same quarter last year.

Wall Street appears to have reacted with shock to the results. Google’s share price went down from US$790 to US$650 following the early announcement. The filing also had a wider ripple effect. According to Reuters a number of US stocks fell in the wake of the results.

“We have been saying this thing was ripe for a pullback. It’s not like they’re Google not being Google, but you still have some major issues,” said BCG analyst Colin Gillis.

“Click prices declined for the fourth consecutive quarter after rising for eight consecutive quarters before then. That’s a negative. This is the mobile problem”.

The acquisition of Motorola, says Gillis, might have also affected Google’s results:

“The other bit is the Motorola millstone had been ignored by the market, and — boom — now you’ve got weak revenue from Motorola. When you acquire a business and you’re about to whack all kinds of people and close offices, you know what happens to the employees? They take their eye off the ball. Sales are down.”

The results concerning Motorola do show a pretty big loss. According to the statement:

Motorola Operating Loss – GAAP operating loss for Motorola was $527 million ($505 million for the mobile segment and $22 million for the home segment), or -20% of Motorola revenues in the third quarter of 2012. Non-GAAP operating loss for Motorola in the third quarter of 2012 was $151 million, or -6% of Motorola revenues.

Another large factor in the decline in Google’s profit rests in the fact that its cost-per-click revenue is down for the fourth consecutive quarter.

A possible explanation for this is that people simply aren’t using Google as much for search anymore.

“The core business seems to have slowed down pretty significantly, which is shocking,” B. Riley analyst Sameet Sinha told Reuters. “The only conclusion I can look at is, search is happening more and more outside of Google, meaning people are searching more through apps than through Google search.”

“That could indicate a secular change, especially when it comes to ecommerce searches. The big fear has always been, what if people decide just to go straight to Amazon and do their searches? And potentially that’s what could be happening.”