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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Alphabet Inc | NASDAQ:GOOGL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.01 | -0.01% | 150.86 | 150.72 | 150.84 | 3,452 | 08:32:57 |
Google Inc.'s (GOOG) third-quarter income shrank 20% as total costs jumped and advertising prices continued to slide.
Shares dropped 9.8% to $678.58 as results missed expectations and the company released its results several hours earlier than expected. The stock is up 18% over the past three months.
Despite consistent double-digit revenue growth for more than two years, Google's shares had been moving sideways for much of 2012. That changed in July, as concerns faded about its Motorola acquisition and the price of mobile-search ads, leading the stock to hit new all-time highs and post its biggest quarterly rally in nearly seven years.
The company, which dominates the search-engine market, closed its $12.5 billion purchase for cellphone maker Motorola Mobility Holdings Inc. in May, as it looks to expand as a hardware provider. It also recently pushed into the increasingly competitive tablet market with its Nexus 7. The Motorola unit posted an operating loss in the second quarter and was viewed as a potential drag on results.
But, Google in August said it will reduce Motorola Mobility's workforce by about 20% to help streamline the unit. Additionally, investors saw hope that online advertising prices could stabilize after Google in its second quarter reported a 1% sequential rise in prices.
For the third quarter, the average cost that advertisers paid Google per click fell 15% from a year earlier, and fell 3% from the prior quarter. Also, paid clicks, a measure of how frequently consumers click on Google's advertisements, increased 33% from a year earlier and were up 6% from the second quarter.
Google generally pulls in less revenue from the advertising it places on mobile devices than it does from traditional personal computers. That's helped create a downward trend for advertiser prices on Google, which has caused some concern.
The Motorola unit brought in $2.58 billion in revenue, with $1.78 billion from the mobile segment and $797 million from the home segment. Its operating loss was $527 million.
Google posted a third-quarter profit of $2.18 billion, or $6.53 a share, down from $2.73 billion, or $8.33 a share, a year earlier. Excluding stock-based compensation and other items, profit fell to $9.03 from $9.72 a share. Revenue, excluding traffic acquisition costs, improved to $11.33 billion.
Analysts surveyed by Thomson Reuters expected earnings of $10.65 a share and net revenue of $11.86 billion.
Total costs jumped 71%.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
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