Could Google’s earnings feed doubt across the tech world?
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Google’s earnings fell short of what analysts were expecting Thursday, sending shares in the tech giant sinking to a six-month low in after-hours trading.
But though Google’s performance marked just the fifth time in the last 27 quarters that the company hasn’t lived up to forecasts, the earnings could leave the tech industry as a whole in doubt about just where things are headed, noted Times financial columnist Tom Petruno in our sister blog Money & Company.
From Petruno:
Google’s latest profit shortfall, small though it was, may further darken investor sentiment about the tech sector. Shares of some of the industry’s leading companies have been under heavy pressure over the last two months, in part on concerns about slowing personal computer sales. Chip giant Intel Corp.’s stock ended Thursday at $19.58, down 6.9% year-to-date. Microsoft Corp. shares are down 8.9% this year and computer networker Cisco Systems Inc. has slumped 15.1%. By contrast, the Standard & Poor’s 500 index is up 4.5% this year and the Nasdaq composite index is up 4%. Tech’s stock woes aren’t universal. Apart from Microsoft, many software shares remain hot issues. Oracle Corp. shares are up 8% this year. BMC Software is up 7.5%.
So why are analysts down on Google for what is a dip in a long history of strong financial performance?
Petruno reports that some of the uncertainty comes from the plans and spending of Google’s new chief executive, Larry Page, who recently took the reins of the Silicon Valley titan from Eric Schmidt.
To read the rest of Petruno’s report, which mentions how smartphones, tablets, Apple and Japan may play into all this, head over to his Money & Company post, Google’s profit shortfall may cast more doubt on tech sector.
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-- Nathan Olivarez-Giles