Shares of Googletumbled 14% in late trading Tuesday after the search giant missed Wall Street earnings estimates by a wide margin.
Google reported quarterly earnings of $1.54 a share, 22 cents below estimates. Revenues after traffic acquisition costs soared 97% to $1.29 billion, but that was just below analysts’ forecasts. The company’s tax rate of 41.8% was well above expectations, which could explain the bulk of the earnings miss, since EBITDA — earnings before interest, taxes, depreciation and amortization — of $814 million was better than expected. Google said its tax rate will return to the 30% range for 2006. Rising costs also shaved earnings.
Still, any sign of weakness in the high-flyer was too much for investors, who have become accustomed to Google trouncing estimates. They sent the company’s shares $60 lower in after-hours trading to $373 a share.
Also after the close, Symantecbeat estimates but warned.
Stocks finished modestly lower Tuesday after Fed Chairman Alan Greenspan’s final Federal Reserve meeting ended with the Fed’s 14th rate hike in 19 months, along with cryptic comments about when the rate hike campaign might end.
The Nasdaq slipped 1 to 2305, the S&P 500 fell 5 to 1280, and the Dow lost 35 to 10,864. Volume rose to 2.67 billion shares on the NYSE, and 2.38 billion on the Nasdaq. Advancers led 17-15 on the NYSE, and 16-14 on the Nasdaq. Upside volume was 43% on the NYSE, and 51% on the Nasdaq. New highs-new lows were 285-40 on the NYSE, and 198-21 on the Nasdaq.
Ericsson, Atherosand Interactive Intelligencegained on their results.
Napstersoared 25% on reports of a possible takeover offer from Google.
RightNow, Nasdaqand Ixysfell on their results.