Google's shares dropped Thursday after its third-quarter earnings report was mistakenly released several hours early, showing disappointing revenue and earnings growth.
After shares dropped by more than 9 percent, trading was stopped for two and a half hours. When trading was resumed, the stock rose slightly and ended the day down 8.3 percent.
Google attributed the early release of the earnings report to a mistake by its publishing firm, R.R. Donnelley, which later said it was participating in an investigation of the cause of the release.
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"Sorry for the scramble earlier today," CEO Larry Page said at the opening of the company's earnings call after the stock market had closed.
Revenue returns were attributed to Google's search and related businesses. Motorola Mobility, acquired recently by Google for $12.5 billion, lost $527 million in the quarter, Google reported.
Google said net revenue, excluding payments to advertising partners, was $11.33 billion, up from $7.51 billion from the year before, which was below Wall Street analysts' expectations of $11.9 billion. Overall revenue was $14.1 billion, up 45 percent.
Net income declined to $2.18 billion in the quarter, or $6.53 a share, from $2.73 billion, or $8.33 a share in the year-ago quarter.
Although Google did not break out figures for its cloud-related business, an analyst firm said indications were that it had reached $85 million in revenues.
Technology Business Research said cloud figures were contained in Google's "Other" reporting category, which rose to $385 million in the quarter from $666 million in the third quarter of 2011.
"TBR believes that this uncharacteristic spike is largely driven by Google's paid-for cloud stack or 'Google Cloud,'" the firm said in an email. "Google Cloud is made up of Google Apps (SaaS), Google App Engine (PaaS) and recently introduced Google Drive and Google Compute Engine (IaaS)."
The firm said that as Google's advertising business slows, the company will view its cloud products and services as a new source of profit.
One analyst said Motorola's poor performance raises questions about whether Google should keep the struggling unit. "Keeping the [Motorola] smartphone business is a risky move, as it could further pressure Google's margins, especially given the fierce smartphone environment, dominated by Apple and Samsung," Julien Blin, directing analyst with Consumer Electronics & Mobile Broadband Infonetics Research, said in an email. "Carrying a struggling unit could sacrifice Google's financial goals -- I don't think it'll be worth it to them."
PUBLISHED OCT. 18, 2012
This story was updated on Oct. 18, 2012, at 5:55 p.m. PST, to include analysis given after press time from Julien Blin, directing analyst, at Broadband Infonetics Research.
