Google Misses Earnings Estimates and Shares Plunge After the Closing Bell
Google said its quarterly revenue surpassed $10 billion for the first time, and that users of its social network Google+ doubled to 90 million and that its phone and tablet operating system Android is boasting 700,000 activations per day. None of that mattered much to investors on Thursday, though, as the stock tanked 9 percent in after-hours trading.
Google on Thursday posted $10.6 billion in fourth-quarter revenue, up 25 percent from a year earlier, and net income that rose 6.4 percent to $2.7 billion. On a per-share basis that excludes certain items, though, the company earned only $9.50, almost $1 short of analyst expectations.
After the disclosure of its financial results, Google’s shares plunged $57 during the after-hours session after they had risen $6.66 to $639.57 during regular trading.
Google also fell shy of net revenue, which excludes the fees that it shares with its partner Web sites. The company posted $8.1 billion but analysts expected about $8.4 billion.
During a conference call, analysts seemed most concerned with a lower “cost-per-click” for Google’s search advertising business, which CEO Larry Page blamed on certain changes the company made to the products. While the tweaks may have dented the CPC number, they didn't harm overall revenue, he noted.
Executives also said that foreign exchange rates weren’t advantageous during the quarter, costing the company about $239 million in revenue.