Google Stock Dives as Earnings Report Released Early

By Jane McEntegart
published

Google's had a bit of a bumpy afternoon.

Google yesterday joined the slew of companies releasing earnings reports this week with results for the quarter ended September 30. However, the company's results were accidentally released early with some pretty serious consequences.

According to MarketWatch, Google was planning to release its results after the market closed, but an early version of the report, found in an 8-K SEC filing, was released at around lunchtime. Stock was trading at around $755 at the time of the report's release but took a dive, dropping as low as $676 per share in the hours that followed. Google actually halted trading for more than two hours this afternoon in an effort to help things settle down.

Revenue was $14.1 billion compared to $12.21 billion last year, however, Google's GAAP net income for this quarter was $2.18 billion compared to $2.73 billion for the same period last year. GAAP earnings per share were posted as $6.53 EPS (333 million diluted shares outstanding) compared to $8.33 EPS for the same period last year (327 million diluted shares outstanding). 

For the full earnings report, click here.

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Jane McEntegart
17 Comments Comment from the forums
  • alidan
    wait... so google pulled in a profit, but because it wasn't as big of a profit as last year, everyone decided to bail out of the company?

    is the stock traid retarded or something? or am i just not seeing the big picture?
    Reply
  • EDVINASM
    Either someone's head will roll or this is just a well thought of exercise.
    Reply
  • ivanto
    The stock price was trading at the price point of assumed earning. On the stock market, share price reflects forecasted future earnings and future losses. So any news about not matching either the loss or income impacts the stock price to sinck or fly. Makes sense?
    -IvanTO
    Reply
  • nieur
    was result that bad considering more than 10% dive in stock price?
    Reply
  • jacobdrj
    nieurwas result that bad considering more than 10% dive in stock price?Considering that they made over 21% less profit... yeah...
    Reply
  • abbadon_34
    the real story is more complicated . the real financial news included some technical errors, autotrading, 25th anniversary of black friday, etc.

    tom's is a computer site, not a car site. not financial site, not whatever else they might try
    Reply
  • alidan
    ivantoThe stock price was trading at the price point of assumed earning. On the stock market, share price reflects forecasted future earnings and future losses. So any news about not matching either the loss or income impacts the stock price to sinck or fly. Makes sense?-IvanTO
    not really, because i see stocks also go up and down because of small announcements outside of profit. i mean sure, i expect to see some amount of change depending on how much money they make, but im willing to bet money that if the stocks didn't stop trading it would have lost a hell of alot more than about 10%

    all over it pulled in 800 million less in profit from last year. still made over 2 billion... that's what i don't get.

    but i can assume that google stock isnt something most people have much if any of, its more for people who have crap tons of money, so all them trying to pull out at the high number, lead to it going lower. if you pulled out at the right time, you could have made an absolute crapton of money. as of right now its at 695$ so im going to assume that the stock price is going to go way up again as people try to get back in on it when its low... if its anything like before, it will return to around its previous value in about a month if not sooner, meaning anyone who pulled out fast enough and re invested stands to make about 80$ per share.

    the more i think about it the more i can see the chain reaction happen, i still thing its stupid, but i am understanding it a bit more now.
    Reply
  • wemakeourfuture
    alidanwait... so google pulled in a profit, but because it wasn't as big of a profit as last year, everyone decided to bail out of the company? is the stock traid retarded or something? or am i just not seeing the big picture?
    You're not seeing the big picture. I have been following Google stock from IPO to now and told someone who has very little shares (but shares none the less) to sell before this quarters earnings. The stock has been on a fantastic run the past several months and the earnings would not keep up with the accelerated stock price.

    Its not about making just a profit that matters. There's many factors to consider. There's expected profits and revenue. There's margins, costs to consider.

    Another key metric is the rate of growth of revenue and profits.

    Example. Company X made 10 million in profits in Year #1.
    Company X made 20 million in profits in Year #2. This is great, profits exist and increased 100%
    Company X made 21 million in profits in Year #3. Profit still existed, by why did profits only increase $1 million over the previous year? Why did profits only rise 5% this year. All sorts of factors could be at play. This could really drive down the stock price, but if this was expected, understood and priced into the stock price the price may not move on this news.
    Reply
  • noblerabbit
    here cometh dotcom bubble redux. Sell Apple yesterday, it will be too late today.
    Reply
  • Kami3k
    The stock market is like a women during menopause it seems.
    Reply