Ahead of the Bell: Google inches up after shocker
NEW YORK (AP) — Shares of Google Inc. perked up in premarket trading Friday as analysts soothed investors shocked by an earnings report that dropped prematurely on Thursday.
The shares were up $8, or 1.2 percent, at $703. On Thursday, they lost $60.49, or 8 percent, to close at $695.
Google was supposed to release its report after the market closed Thursday, but they leaked prematurely, setting off the stock plunge. Trading was then halted for nearly three hours before resuming just before the close.
Google earned $2.18 billion, or $6.53 per share, during the three months ending in September. Excluding the cost of employee stock options and restructuring charges at cellphone maker Motorola Mobility, which Google bought this summer, the figure would have been $9.03 per share. Analysts polled by FactSet were expecting $10.63 per share, on average.
Revenue climbed 45 percent from last year to $14.1 billion. Excluding compensation for websites that generate traffic for Google's ads, revenue was $11.33 billion. Analysts were expecting $11.86 billion.
Jefferies & Co. analysts Brian Pitz and Brian Fitzgerald said Google's results weren't quite as bad as they seemed at first. Much of the miss was attributable to Motorola and fluctuations in foreign exchange rates. They kept their $850 price target and "Buy" rating in a Friday morning report.
At Cantor Fitzgerald, Youssef Squali said stock plunge was understandable, but he believes the stock will come back up, given that Google is still growing and the Mountain View, Calif., company's stock price is "compelling" relative to its earnings.
Shares are up nearly 8 percent in 2012.