Google reports disappointing drop in profits
Google on Thursday reported a 20 percent drop in third-quarter profits, announcing disappointing results which sent the Internet giant’s stock price tumbling.
Net profit was reported at $2.18 billion, compared to $2.73 billion in the same period a year ago. The results were made public in a regulatory filing hours ahead of their scheduled release.
Google stock slid 9.0 percent after the news to $687.30, taking the company’s market value back down below that of Microsoft, which it overtook earlier this month.
Google’s earnings per share adjusted for special items amounted to $9.03, far below Wall Street expectations of $10.65 per share.
Revenue excluding payments to Google partners rose 19 percent from a year ago to $11.53 billion.
The statement filed with regulators did not include any comments on the reasons for the slump in profits. Google normally issues its results and an accompanying statement after the close of the stock market.
Google in May completed a $12.9 billion deal for Motorola Mobility, a key manufacturer of smartphones and other devices that put the Internet giant in head-to-head competition with Apple.
Google acquired 17,000 patents with the purchase of Motorola Mobility and has been strengthening its patent portfolio in the fight for dominance in the booming smartphone and tablet market.
Motorola Mobility was created in 2011 when US-based Motorola Inc. split the company into two separate entities: a mobile devices unit, and a government and public safety division known as Motorola Solutions.
Google remains dominant in its core area of online advertising with a 74.5 percent share of the US search ad market, according to data from eMarketer.
Google’s ad revenue alone is expected to account for 41.3 percent of total US digital ad revenues in 2012, eMarketer projects.