It probably wasn't a good sign that Google's (GOOG) share's finished up $6.66 today. However, the internet giant took a major hit Thursday after the market close, releasing Q4 earnings that missed analyst expectations.
Shares Plunge Day After Protests
Google didn't black out its website like Wikipedia and Craigslist did yesterday, instead opting for a black box over its logo to help raise awareness about the congressional debate over SOPA and PIPA yesterday. However, it now seems possible that it was hiding its face in shame ahead of the earnings miss that was coming.
Google reported net income of $2.71 billion, or $8.22 per share, up from last year's $2.54 billion for $7.81 per share. However, this was well below the figure of $10.49 per share that analysts polled by Reuters were expecting. Google did manage to outpace expectations of $8.41 billion for total revenue, posting a 25 percent year-over-year increase to $10.58 billion.
CEO Larry Page, though, chose to focus on the positive and the future, glossing over any difficulties in the Q4 earnings statement. "Google had a really strong quarter ending a great year. Full-year revenue was up 29 percent, and our quarterly revenue blew past the $10 billion mark for the first time," he said. "I am super excited about the growth of Android, Gmail, and Google+, which now has 90 million users globally--well over double what I announced just three months ago. By building a meaningful relationship with our users through Google+ we will create amazing experiences across our services. I'm very excited about what we can do in 2012 -- there are tremendous opportunities to help users and grow our business."
Shares in Google dropped over 10 percent in after hours trading immediately following the release of the earnings report after market close before rallying and reducing losses to just over 8 percent.
Concerns Over Motorola Purchase
Google could seem to do no wrong of late, beating market expectations in five of the last seven quarters. However, the company does have its issues. News yesterday that Motorola Mobility (MMI) will miss expectations for smart phone sales during the all-important Holiday quarter. Google has announced plans to purchase Motorola, a deal expected to be completed early this year, and it has created some wariness among Google investors.
"You've got this big millstone that's about to be draped around Google's neck," said BGC Partners analyst Colin Gillis. "Motorola is a low to no-margin business mixing with a higher margin business."
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer