The company shares dropped by up to 10% after financial printing firm RR Donnelley filed a draft of the results three hours ahead of schedule, revealing an unexpected fall in quarterly profits.
Trading was suspended on the Nasdaq for 2.5 hours and later resumed, with shares recovering slightly to end the session 8% down. The drop wiped $19.8bn off the company’s value.
Google is a popular holding in many portfolios, with data from FE Analytics showing more than 90 funds owning the company in their top-ten holdings.
The largest active fund with Google in its top ten is Jeremy Podger’s £1,327.3m Fidelity Global Special Situations Fund where it accounts for 2.4% of the portfolio, according to the latest factsheet.
Other sizeable funds with significant holdings include Andy Headley and Charles Richardson’s £1,157.5m Veritas Global Focus Fund, Aris Vatis’ £1,032m Fidelity American Fund and Susan Bao and Thomas Luddy’s £788.5m JPM US Select 130/30 Fund.
Google’s results showed that profits fell 20% from $2.73bn to $2.18bn over the July to September period, coming in below expectations. Net revenue excluding traffic acquisition costs of $11.3bn were also worse than analysts expected.
Costs related to the acquisition of loss-making mobile phone maker Motorola Mobility and the strong dollar hampered Google’s overall results.
BCG analyst Colin Gillis said details from the financial results highlight a number of “major issues” facing the internet company, regardless of their early release.
"Click prices declined for the fourth consecutive quarter after rising for eight consecutive quarters before then,” he explained. "The other bit is the Motorola millstone had been ignored by the market and – boom – now you’ve got weak revenue from Motorola."
