Google halted on early report

Posted: October 20, 2012

NEW YORK - Google plummeted almost $80 a share, more than 10 percent, and trading was halted 21/2 hours Thursday after a disappointing earnings report was published ahead of schedule, surprising investors.

Bleak figures in the report about online advertising dragged down Facebook stock, too, sending the Nasdaq composite index skidding on a day when the broader stock market was mostly flat. The Nasdaq fell 31.25 points, or 1 percent, to close at 3,072.87.

Google was trading at $754 per share at 12:30 p.m., then fell almost $20 in a minute after investors saw the report, a draft. It dropped as low as $676, and Google halted trading at 12:50 p.m., with the stock at $687.

The stock was halted until 3:20 p.m. Companies routinely halt trading when they have news to release to investors during the market day, but 21/2 hours is an unusually long suspension.

The embarrassing mix-up prompted Google CEO Larry Page to preface his review of the quarter with an apology during a conference call with analysts.

"I am sorry for the scramble earlier today," Page said, still sounding hoarse from a mysterious throat ailment. The problem left Page unable to speak during the summer, causing him to skip Google's second-quarter earnings call three months ago.

When trading resumed, the stock climbed slightly, but it still finished down $60.49, or 8 percent, at $695.

Google blamed a printing company, R.R. Donnelley & Sons, for filing its quarterly statement with the Securities and Exchange Commission more than three hours ahead of schedule.

The Google report said it earned $2.18 billion from July through September, down from $2.73 billion in the same period a year ago.

Profit came to $6.53 per share, and would have been $9.03 if not for accounting costs from employee stock compensation and restructuring charges related to Google's acquisition of Motorola Mobility, a cellphone maker with operations in Horsham, where it makes set-top boxes for the cable television industry.

Still, analysts polled by FactSet, a provider of financial data, were expecting $10.63 per share.

The broader market fared better: The Dow Jones industrial average closed down 8.06 points, or 0.06 percent, at 13,549.94. The Standard & Poor's 500 index fell 3.57 points, or 0.2 percent, to 1,457.34.

The broader market is "waiting for a clear catalyst," said Quincy Krosby, market strategist at Prudential Financial.

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