(AFP/Getty Images)
Google CEO Larry Page probably wishes he still couldn’t talk.
Making his first appearance before a Wall Street crowd since a springtime ailment caused him to lose his voice, Page yesterday was confronted with a botched earnings release, a YouTube site that crashed for about 20 minutes and tepid third-quarter results that prompted investors to race for the exits. Google shares fell 8 percent to $695.
The hoarse CEO tried to calm antsy investors rattled by the early release of surprisingly weak results, dragged down by mobile ad pains and the acquisition of Motorola Mobility.
Google reported a 20 percent dive in net income to $2.18 billion. Excluding certain items, it earned $9.03 a share, vastly underperforming the $10.65 analysts had expected.
The amount advertisers paid per ad click-through, a barometer of Google’s success, fell 15 percent from last year — the result of lower fees on mobile platforms.
Page tried to put the best face on Google’s results. In a late afternoon call, he said he was “really excited about the progress we’re making creating a beautifully simple, intuitive Google experience across all devices.”
By that time, investors had pushed down Google shares by nearly 10 percent — after the Mountain View, Calif., search giant surprised the world by accidently releasing its results at about 12:30 p.m. They were supposed to be released after 4 p.m.
Google blamed the early release on R.R. Donnelly, its printer. There was no doubt that the press release wasn’t ready because it contained a placeholder for a comment from Page.
Google halted trading in its shares for roughly two-and-a-half hours following the mishap (see story below).
Despite the confusion around the timing of yesterday’s earnings release, one things is clear: Last year’s $12.5 billion deal to buy Motorola Mobility has tied Google to a business that is losing money.
Motorola acted as a millstone on Google, losing $527 million. The mobile hardware maker is losing money faster than Google can cut costs, said analyst Colin Gillis of BGC Partners.
Page tried, at times, to play it light. When discussing the company surpassing $14 billion in total sales for the first time — coming as it turned 14 — he joked: “Not bad for a teenager.”
Google reported net revenue, excluding traffic acquisition costs, of $11.3 billion for the quarter, below expectations for about $11.9 billion.
Google’s travails spread beyond mobile: Growth in its core desktop search business is slowing.
Analysts yesterday asked if this is the new normal for old-fashioned search.
Page said the Street was asking the “wrong question.” He pointed to the future of search as not tethered to the desktop, but instead jumping from mobile to laptop to tablet, giving Google the chance to offer advertisers new opportunities across all screens.
Google is on track to generate $8 billion in annual mobile revenues, up from $2.5 billion a year ago, as the company makes more money on ads and through media and app sales in its Play store.