Earnings error halts Google
October 18, 2012
Nasdaq temporarily halted trading in Google stock on Thursday, causing shares to drop by 8 percent at closing. The drop took the company's market value below that of Microsoft, which it had overtaken earlier this month.
The abrupt slump came after Google inadvertently reported a 20 percent drop in its third-quarter profits. Trading of Google stock was suspended for about two hours and reopened about 90 minutes before the markets closed.
Google had intended to release the disappointing figures, which miss expectations on both revenue and earnings, after trading closed. Instead the results were released at the height of trading after its financial printers, RR Donnelley, filed the results without authorization.
The company's figures showed that net profit had slipped to $2.2 billion (1.7 billion euros), from $2.7 billion in the same quarter a year ago.
Regulators did not offer an explanation regarding the slump in profits. However, the decline has largely been attributed to Google's uphill battle to turn around Motorola, the loss-making smartphone maker it bought earlier this year. The takeover resulted in a rise in operating expenses from $3.3 billion a year ago to $4.8 billion in the recent quarter.
ccp/mkg (AFP, dpa, Reuters)