Archive for the ‘Profits’ Category

Google’s 2Q Profit Disappoints Investors

July 20, 2007

“Google Inc. (GOOG, News) co-founders Sergey Brin and Larry Page have always told Wall Street that positioning the Internet search leader to realize its long-term ambitions is more important to them than meeting the earnings expectations of shortsighted investors. Just in case anyone forgot, the company punctuated the point with its second-quarter results.Propelled by the online advertising boom, Google said Thursday that revenue surged to $3.87 billion, up 58 percent from the same time last year – a gain that was slightly above analyst estimates.

But Google’s profit margins narrowed as management ramped up spending to hire additional employees and buy more content for its Web sites. That left Google with a 28 percent increase in its second-quarter earnings, by far its slowest growth since becoming a public company in August 2004.

Investors expressed their dismay in Thursday’s extended trading, causing Google shares to plunge by $39.06, or 7.1 percent, after ending the regular session at $548.59. If it carries over into Friday’s trading, the harsh reaction threatens to wipe out about $12 billion in shareholder wealth.”