Google, Microsoft Not Making Enough Money
By Anna Johnson on July 18th, 2008Believe it or not, not all Google touches turns to gold. And despite years of success, Microsoft has faltered too.
But let’s not exaggerate – both companies posted respectable earnings results. They just missed Wall Street’s profit expectations. Unfortunately, doing so meant they suffered bruising stock price declines.
Google reported strong quarterly growth, achieving $3.87 billion in revenue, excluding commissions paid to advertising partners. However, its expenses were higher than expected, and on top of lower than expected interest income, it missed Wall Street’s earnings per share forecasts. As a result, investors drove down its share price by over 7 percent to $493 a share in after-hours trading on Thursday.
Microsoft, in record earnings, achieved $60 billion in revenue for the 2007-8 fiscal year. But it too missed Wall Street’s profit expectations, causing its stock to drop by more than 6 percent in after-hours trading.
Let’s face it. Wall Street is kinda nervous right now and even the slightest disappointment seems to send the bears into panic.
Source: Brad Stone, “In Surprise, 2 Tech Titans Disappoint”, The New York Times, July 18, 2008
