Google feels sting of financial crisis
Google reported a sharply lower fourth-quarter profit Thursday because of bad investments, while its core business showed resiliency amid the global recession.
The results, which beat analyst expectations, were enough to dispel investor concerns about how the company is weathering the gloomy economy. But at the same time, the earnings highlighted that the Mountain View, Calif.-based Internet giant isn’t entirely immune from the downturn.
Google said its fourth-quarter profit fell 68 percent to $382 million, or $1.21 per share, from $1.2 billion, or $3.79 a share, a year ago. Much of the decline was attributed to a $1.09 billion charge for soured investments in wireless provider Clearwire and in the AOL Web portal.
Excluding various expenses, including the decline in value of its investments, Google would have earned $5.10 per share. Analysts had expected a $4.97 per share profit.
Google’s fourth-quarter revenue increased 18 percent to $5.7 billion, up from $4.83 billion for the equivalent period in 2007.
“Google performed well in the fourth quarter despite an increasingly difficult economic environment,” Eric Schmidt, Google’s chief executive, said in a statement.
Google executives have cast their company as being more resistant to the recession than other companies.
Source: San Francisco Chronicle