Motorola drags down Google in latest financial results

October 19, 2012 | By Fred Donovan

Motorola Mobility (NYSE: MMI), the mobile device unit of Google (NASDAQ: GOOG), dragged down its parent company's financial results in the third quarter, prompting an 8 percent decline in stock price on Thursday. That decline continued during mid-day trading on Friday.

Motorola posted a $505 million operating loss for the mobile sector in the third quarter, compared to an operating loss of $41 million in the same quarter last year, when it was an independent company. Motorola had revenues of $2.58 billion, below analysts' estimates of $3.3 billion.

Google reported third quarter revenues of $14.1 billion, up 45 percent from last year. This was the first quarter in which Motorola revenues were included.

Google reported a GAAP net income of $2.18 billion, or $6.53 per share, compared with a profit of $2.73 billion, or $8.33 per share, for the same quarter in 2011. Adjusted earnings per share were $9.03 per share, below analyst estimates of $10.63 per share.

A glitch by R.R. Donnelly & Co., which printed Google's financials, resulted in an early release of the figures around lunch time on Thursday and a request from Google to stop trading. Trading resumed and the stock closed the day 8 percent lower than it opened.  

"I am sorry for the scramble earlier today," Google CEO Larry Page told Wall Street analysts after the market closed, according to a Time  report. "As our printer said, they hit send on the release just a bit early."

According to analysis by the Wall Street Journal, Motorola's sales of mobile devices dropped significantly. In the third quarter, the mobile unit's sales were $1.78 billion, down about 26 percent from the year-ago quarter when Motorola was an independent company.

"It's hard to see how results are going to improve dramatically in the fourth quarter as Apple (NASDAQ: AAPL) pushes its new iPhone 5 aggressively around the world, and Samsung continues to drive sales of its popular Galaxy S III smartphone," the Journal's Spencer Ante commented.