This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Google Miss Stuns Wall Street

Updated from 5:14 p.m.

Try this sentence on for size: Google (GOOG - Get Report) shares are getting hammered.

The stock dropped more than 7% in late trading Thursday to $509.01 after the Net giant shocked Wall Street with a second-quarter earnings shortfall.

The Mountain View, Calif., company made $3.56 a share, excluding items. Net revenue, excluding the money Google shares with its advertising partners, was $2.72 billion.

Analysts surveyed by Thomson Financial were looking for a $3.59-a-share profit on net revenue of $2.68 billion.

At such a high EPS figure, the miss is less than 1%. But it comes as a big surprise from a company known to breeze right by Wall Street forecasts. Indeed, Google topped Wall Street expectations by more than 11% during its first quarter.

Still, Google's miss didn't come because of a lack of top-line growth, with revenue coming in around the high end of analysts' forecasts.

Instead, the company hired more aggressively than even it had planned to during the beginning of the year, CEO Eric Schmidt told investors during a conference call.

"We exceeded spending when it came to headcount, and going forward we will watch this very carefully," Schmidt said. The bulk of the new hires were sales, marketing, and engineering personnel, the company said.

Google also continued to spend aggressively on infrastructure and facilities. But Schmidt also said the company would ultimately benefit from the fast ramp-up of its system.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
GOOG $533.70 -1.30%
YHOO $41.42 -1.50%
AAPL $126.58 -1.60%
FB $77.57 -1.60%
TSLA $231.94 0.62%

Markets

DOW 18,004.14 -66.26 -0.37%
S&P 500 2,102.13 -12.36 -0.58%
NASDAQ 4,963.2020 -53.7270 -1.07%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs