Motorola Mobility acquisition is killing Google

[cheezy321]

Googles' earnings report was released early today and motorola mobility is killing their bottom line.

Stock is down 9% today. Profits would have been up year over year if they didn't buy this dog of a company. If you exclude MMI, revenue actually rose 18%.

http://www.washingtonpost.com/busin...ecb380-1944-11e2-ad4a-e5a958b60a1e_story.html

Google Inc.’s stock plunged suddenly on Thursday afternoon after a contractor released the search company’s third-quarter earnings report early, by mistake.

The stock fell $68.19, or 9 percent, to $687.30 before trading was halted to give investors a chance to digest the news. Google’s report had been slated for release after the close of regular trading Thursday.

Google said printer R.R. Donnelley & Sons Co. filed Google’s quarterly statement early to the Securities and Exchange Commission. The printer didn’t immediately respond to a request for comment.

In the regulatory filing, Google said it earned $2.18 billion, or $6.53 per share, during the three months ending in September. That compared with net income of $2.73 billion, or $8.33 per share, last year.

The earnings would have been $9.03 per share, if not for Google’s accounting costs for employee stock compensation and restructuring charges related to the acquisition of Motorola. Analysts polled by FactSet were expecting $10.63 per share, on average.

Revenue climbed 45 percent from last year to $14.1 billion. Excluding compensation for websites that generate traffic for Google’s ads, revenue was $11.33 billion. Analysts were expecting $11.5 billion.

The strong dollar appeared to have contributed to Google’s miss. The company said that if foreign exchange rates had been stable, its revenue would have been $136 million higher.

Excluding this summer’s acquisition of cellphone maker Motorola Mobility, Google’s revenue rose 18 percent.

I wonder where we will be when it comes to device makers in a couple years. Its pretty much only Apple and Samsung that are making money in this market. MMI is bleeding money, a loss of $500 million in one quarter? Ouch google.

 

[LostPassword]

Google needs to stop messing around and take control of that company. Make a moto nexus. Moto tablet. Price it right.

 

[dguy6789]

Is this unexpected in some way? *Company spends lots of money buying something* *Financial reports for that quarter show they made less money than normal*

 

[cheezy321]

Google needs to stop messing around and take control of that company. Make a moto nexus. Moto tablet. Price it right.

100% agree. The company sucked before and was bleeding money prior to the purchase. Yet Google continues to let it run as an independent subsidiary. Its stupid. Take over that company, flush out the crap, create some great devices and profit.

 

[cheezy321]

Is this unexpected in some way? *Company spends lots of money buying something* *Financial reports for that quarter show they made less money than normal*

The lowered revenue was not due to the purchase, that happened a couple quarters ago. It was due to motorola mobility bleeding $500,000,000 dollars in Q3.

 

[Mopetar]

Is this unexpected in some way? *Company spends lots of money buying something* *Financial reports for that quarter show they made less money than normal*

The problem is that Motorola is losing money on an ongoing basis and that it's costing Google a lot more than anticipated to fix the problem and there's no indication that it's fixed yet.

I think the market's reaction is pretty overblown though. Revenue is up, they still made a good profit, and there's not a lot of other reason to think the company is having problems.

 

[grkM3]

Yeah Google should just take over and have moto make the sickest nexus cells.make 3 versions,a4in,4.3 and a 4.8 and go nuts on the specs and only use moto as a nexus brand.

Completely unlock all of them and get rid of motos encrypted boot loaders.

 

[NutBucket]

If they simply eliminated "Blur" the bottom line would surely drop!

 

[dguy6789]

Moto was losing money before the purchase and it isn't exactly easy to turn a company around really quickly. Still just seems like the article is stating the obvious. I think if Moto just put the Razr Maxx HD on all 4 carriers, marketed it properly, and sold it for $199 they would decimate the Galaxy S3 since it's a straight up superior device.

 

[McWatt]

Moto was losing money before the purchase and it isn't exactly easy to turn a company around really quickly. Still just seems like the article is stating the obvious. I think if Moto just put the Razr Maxx HD on all 4 carriers, marketed it properly, and sold it for $199 they would decimate the Galaxy S3 since it's a straight up superior device.

Would Google even care about the 10% drop in GS3 sales you expect, especially given that they make money on those GS3 sales?

 

[OBLAMA2009]

motorola shouldnt be a money losing brand. they are basically the most desirable brand out there outside of apple but they continually release stuff 8 months later than samsung. i believe the raz max was verizons best selling phone for the last year, if raz hd maxx had been out 5 months ago at least half the people on verizon would have chosen that phone over gs3, i know i would have. motorola can easily turn things around even without special help from google.

 

[jpeyton]

They bought Motorola for their patents, not their phones.

Even knowing what they do now, they would have still taken the deal. $500 million in losses from Motorola is chump change when you consider what's really at stake here: the future of mobile computing.

 

[ponyo]

Sometimes losing is actually winning. Google is a smart company. Perhaps the fix is more complicated than they thought or it's actually more beneficial right now not to fix it. We don't know Google's ultimate goals and plans.

 

[OBLAMA2009]

They bought Motorola for their patents, not their phones.

Even knowing what they do now, they would have still taken the deal. $500 million in losses from Motorola is chump change when you consider what's really at stake here: the future of mobile computing.

no thats just what they had to say in order to not freak out the rest of the manufacturers. everyone (ms, google, samsung, nokia) would love to have the insanely profitable type of business (software/hardware/itunes) that apple has

 

[dguy6789]

no thats just what they had to say in order to not freak out the rest of the manufacturers. everyone (ms, google, samsung, nokia) would love to have the insanely profitable type of business (software/hardware/itunes) that apple has

I'm inclined to agree. I think both Google and Microsoft are trying to get into the kind of position Apple is. I am pretty confident Microsoft is going to produce their own Windows phone within 2 years maybe even in 2013.

 

[jpeyton]

Only $2.18 billion in profits?!? Revenue only up 45%?!?

Google is a goner. They are being killed currently and will soon be dead.

Mark cheezy's words, the prophecy has been foretold.

 

[Mopetar]

no thats just what they had to say in order to not freak out the rest of the manufacturers.

No, patents are pretty much why they bought Motorola. Google wanted to have their own chest of patents that they could use, and Motorola had a lot of mobile patents. Also, Motorola was threatening to go after other Android manufacturers with their patents in addition to Apple and Microsoft. That had the potential to make the market too much of a mess for Google's liking so they had to act.

 

[obidamnkenobi]

Yeah Google should just take over and have moto make the sickest nexus cells.make 3 versions,a4in,4.3 and a 4.8 and go nuts on the specs and only use moto as a nexus brand.

Completely unlock all of them and get rid of motos encrypted boot loaders.

and exactly zero major carriers would take it, would spend nothing marketing it, and try to dissuade people walking into stores from buying it. I.e. 90% of people buying phones would avoid it like the plague. Great plan.

 

[Strk]

Only $2.18 billion in profits?!? Revenue only up 45%?!?

Google is a goner. They are being killed currently and will soon be dead.

Mark cheezy's words, the prophecy has been foretold.

It's the stupidity of public companies. It's always "it could be higher."

 

[grkM3]

and exactly zero major carriers would take it, would spend nothing marketing it, and try to dissuade people walking into stores from buying it. I.e. 90% of people buying phones would avoid it like the plague. Great plan.

And please tell me what major carriers carry the RAZR other than verizon

 

[OBLAMA2009]

and exactly zero major carriers would take it, would spend nothing marketing it, and try to dissuade people walking into stores from buying it. I.e. 90% of people buying phones would avoid it like the plague. Great plan.

no what would happen is google would sell high end phones directly for less than the carriers, everyone would realize how badly theyve been ripped off by the carriers, and everyone would walk around muttering "imma git ma nex fone frum googa, imma git ma nex fone frum googa..."

 

[Phynaz]

consider what's really at stake here: the future of mobile computing.

Hyperbole much?

 

[NikolaeVarius]

Only $2.18 billion in profits?!? Revenue only up 45%?!?

Google is a goner. They are being killed currently and will soon be dead.

Mark cheezy's words, the prophecy has been foretold.

People say that the market is smart.

No its not, its fucking stupid. An "ideal market" of large amount of sellers/buyers is not ideal when you put human stupidity at a mob scale.

 

[Chrono]

Look.. they inherited product cycles... gotta give google sometime until all the stuff that was already in the works is released. I heard there are some good stuff coming out in the not so near future... let's just wait and see.

 

[Medu]

No, patents are pretty much why they bought Motorola. Google wanted to have their own chest of patents that they could use, and Motorola had a lot of mobile patents. Also, Motorola was threatening to go after other Android manufacturers with their patents in addition to Apple and Microsoft. That had the potential to make the market too much of a mess for Google's liking so they had to act.

Maybe someone should of told Google that Motorola's patents are worthless as they are deemed important and must be shared.