Google's 3Q earnings miss analyst target
SAN FRANCISCO (AP) — Google's third-quarter earnings slipped 5 percent on higher expenses and as the Internet search leader absorbed a charge covering a mobile patent.
The results announced Thursday fell below analyst estimates, triggering a nearly 3 percent decline in Google's stock price in extended trading.
Google Inc. earned $2.81 billion, or $4.09 per share, for the three months ending in September. That compared to income of $2.97 billion, or $4.38 per share, at the same time last year.
The earnings for the latest quarter were dragged down by a $378 million charge tied to patent royalties that Google acquired when it bought Motorola Mobility in 2012. Google is now in the process of selling Motorola to Lenovo Group in a deal expected to close by the end of this year.
If not for the charge and other one-time items, Google said it would have earned $6.35 per share. That figure missed the analyst target of $6.46 per share among analysts surveyed by Zacks Investment Research.
The Mountain View, California, company posted revenue of $16.5 billion, a 20 percent increase from year. But Google's operating expenses, excluding costs for employee stock compensation, surged 30 percent as the company added nearly 3,000 employees during the quarter.
After subtracting Google's ad commissions, revenue stood at $13.2 billion, in line with analyst projections.
Google's stock shed $15.13 to $509.38 in extended trading. The stock has fallen 4 percent this year.