The Early Release of Google Shares

GoogleInc. sGOOG-0. 72%quarterly earnings report hit Wall Street more than than threesome hours early on Thursday due to a glitch. The bigger glitch was what the Internet giants results truly showed. Enlarge Image Shares of Google plunged after the companys third-quarter results missed expectations of strong growth, and inadvertently were released well before the markets close. Does Googles notable tax income and earnings miss spell trouble for the tech sector? Is this a buying opportunity in Google shares? Ken Sena, Ever core managing director, joins The News Hub to discuss.Photo REUTERS. Among the litany of issues, the Internet search giants profits slid 20% from a year earlier to $2. 18 gazillion, or $6. 53 a share. Revenue rose 45% to $14. 1 million, thanks to the incorporation of Googles newfound Motorola hardware unit. But revenue enhancement excluding Motorola slowed for the fourth consecutive quarter, dipping to a growth rate of 19% from order of more than 20% for th e past few quarters. At the same time, Motorola as well revealed a bigger-than-expected operating sledding. The pale results, coupled with their unexpectedly early release from financial printerR.R. DonnelleyRRD-2. 56% Sons Co. , wiped $22 billion off-key Googles market capitalization halfway through the day. Googles shares halted trading for a time before resuming. Google shares tumbled after the companys Q3 earning slipped out(a) unseasonablely. WSJs John Letzing has details on Digits. Photo Getty Images. As of the 4 p. m. market close, the shares had recovered slightly to devastation at $695, down $60. 49, or about 8% for the day. Still, the stock drop was a reversal for Google, which had experienced a run-up in its shares in recent months.The companys market capitalization had recently pulled even withMicrosoftCorp. MSFT+0. 44%for the first time, fueled by perceived good news about its online-ad business and missteps from rivals such asFacebookInc. FB+0. 33% At the crux o f Googles profit slide was the growth rate of its biggest and just about profitable revenue engine ads on its Web-search engine and video site YouTube. The growth rate of those ad sales has steadily dropped since mid-2011. In the latest quarter, sales of the ads rose 15%, but that was down from 39% growth a year ago. The growth rate for uch ads fell not because advertisers were buying fewer of the adsin fact, Google sold 33% more ads in the third quarter. But the average price paid by Web-search advertisers to Google per click dropped by 15% in the third quarter, Google said. The ahead of time Earnings Release * HeardBuying Opportunity * Early Release a Human Error * P ceaseing Larrys Quote * PendingLarry From Silent to Meme * Five Takeaways * Google Unveils $249 Chrome Laptop * Retail Investors Cant reenforcement Up Driving the declining prices for the ads was the shift by advertisers toward mobile ads, analysts said.That change is hurting Google in the short call because mobi le ads cost less than online ads viewed on desktop computers. Some industry experts, however, predict the price derived function will be minimal by the end of next year. Other Web companies are also grappling with the shift to mobile ads. Facebook, which reports earnings next week, has been racing to offer more mobile ad formats after earlier focusing more on online ads viewed on PCs. Google also faces toughening competition in its core search market, which also has a knock-on effect on its search ads.People may be doing some of the most valuable type of Web searchesthose that relate to shoppingon sites likeAmazon. comInc. AMZN+0. 82%rather than on Google, said Sameet Sinha, a stock analyst at B. Riley Co. Advertisers generally are happy with Google. But Microsoft Corp. s Bing search engine, which also powersYahooYHOO+1. 51%Search, has been capturing market share over the past year, according to Aaron Goldman, question marketing officer of Kenshoo Ltd. , which helps companies lik eExpediaInc. EXPE+1. 35%andSears HoldingCorp. SHLD+1. 4%advertise online. Were seeing the Yahoo/Bing vane taking share because clients get a 30% better return on their investment than on Google, he said. Enlarge Image On an earnings call Thursday, Google Chief Executive Larry varlet promptly moved to calm fears about mobile after saying he was sorry for the scramble involving the premature earnings release. Mr. Page, speaking in a halting and hoarse voice, said there is tremendous innovation in advertize, which I believe will help us monetize mobile queries more in effect than desktop today. He also noted there are more than 500 million devices power by Googles mobile Android software and that come preloaded with Googles search engine and its other services. Google stands to take a bigger revenue cut from ads that appear on Android devices than it does fromAppleInc. sAAPL+1. 36%iPhone and iPad. Mr. Page said Google was on pace to generate $8 billion a year from mobile devices, in cluding advertising and sales of music, movies and apps on Android devices. A year ago, Google said it was on pace to generate $2. billion related to mobile devices, but that included only mobile ads, not content sales. Googles $12. 5 billion acquisition of Motorola also dragged on results. In its first full quarter as part of Google, the handset maker generated $2. 58 billion in revenue, lower than the $2. 75 billion that Mr. Sinha expected. Motorola also had a loss of $527 million. Google has said that it plans to cut costs at the division, including by laying off 20% of Motorola staff, or 4,000 jobs. On the call Thursday, Google said Motorolas results would be quite variable in the coming quarters.Despite all the issues, some analysts who had been optimistic on Google remained upbeat. While slight overall, Google numbers are not as bad as they ab initio appeared, wrote Doug Anmuth, a stock analyst atJ. P. Morgan ChaseJPM-0. 35%& Co. , during Googles stock halt, adding that any investors who bought into the stock would be taking advantage of the sharp selloff. Google said it had $45. 7 billion in cash at the end of September, up from $43. 1 billion at the end of the second quarter. Its head count was 53,546, down from 54,604 three months earlier, including 17,428 employees at Motorola.