The Internet search giant reported another quarter of rapid revenue growth on the strength of its core Internet search and advertising business Thursday, but expenses grew faster than investors had anticipated and profits fell short of analysts’ expectations.
Within minutes of Google’s announcement, which was made after the close of markets, disappointed investors sold off Google’s shares in after-hours trading, slashing their value by about $42, or more than 7 percent, to about $506. Shares of Google had risen steadily in recent weeks, in part, on speculation that the company, which does not provide guidance about its expected financial performance, would surpass Wall Street estimates.
“The company spent too much, as they said they might some day,” said Jordan Rohan, an analyst with RBC Capital Markets. “It wasn’t a bad quarter. It was a quarter where the analysts’ models need to be reset at a slightly lower level of profitability, and that hadn’t happened in a while.”
Source: nytimes.com
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