Google Inc.’s earnings growth bogged down more than investors anticipated during the second quarter, raising worries that the ailing U.S. economy is starting to sap the Internet search leader.
Although Google’s management maintains the company will thrive even if the economy weakens further, the results released Thursday caused Google shares to plunge more than 7 percent.
Google earned $1.25 billion, or $3.92 per share, during the three months ended in June. That represented a 35 percent increase from net income of $925 million, or $2.93 per share, at the same time last year.
If not for costs incurred for employee stock compensation, Google said it would have earned $4.63 per share. That figure missed the average earnings estimate of $4.74 per share among analysts surveyed by Thomson Financial.
Investors expressed their dismay as Google shares plummeted $40.70, or 7.6 percent, in Thursday’s extended trading after closing at $533.44, down $2.16.
Google’s second-quarter revenue fared slightly better than earnings, rising 39 percent to $5.37 billion from $3.87 billion at the same time last year.
And get this- It marked just the fourth time that Google hasn’t exceeded analyst expectations in its 16 quarters as a public company.