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Google's lackluster earnings report leaks early, sending stock into a slump

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(Read caption) Journalists try out Google's Nexus 7 tablet at a promotional event in Tokyo in September. Google reported lacklaster third quarter profits Thursday, causing shares in the company to drop.

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Google stock tanked Thursday after Google released its third-quarter results a few hours early – an apparent mistake on the part of the Mountain View company.

"As long as I've been doing this, I have never seen a company reporting in the middle of the day," Christine Short, an analyst at S&P Capital IQ research firm, told USA Today.

Worse yet, the results were widely viewed as a disappointment: Google's net income is down from $2.73 billion this time last year to $2.18 billion Thursday, while operating expenses have climbed from $3.28 billion to $4.81 billion. 

So what's behind the weaker than-expected earnings? Well, over at Business Insider, Henry Blodget points a finger at Motorola Mobility, which was officially acquired by Google in May. 

As Blodget points out, Google's core business delivered $11.4 billion in gross revenue – just shy of the expected $11.5 billion mark – while Motorola's numbers were way down across the board. "Most of the disappointment came from a business that was almost certain to disappoint – the dying elephant known as Motorola," he concludes. "Google's core business, meanwhile, came in just below expectations." 

Other analysts pointed to shrinking revenue from online advertisements.

"The average cost per click decreased 3 percent from last quarter and 15 percent from last year, a steeper decline than analysts expected, in part because of the growth of mobile ads, which tend to cost less," writes Claire Cain Miller of The New York Times

In related news, Google has distributed invitations to a major press event on Oct. 29, in New York. Oct. 29, of course, is the same day Microsoft is expected to officially roll out Windows Phone 8 – a fact that Google reps must certainly have been aware of. Google hasn't said exactly what products it intends to highlight at the event, but smart money is on the Key Lime Pie mobile operating system and a new Nexus phone. 

"The Galaxy Nexus was announced a full year ago. It's time for a new Nexus-named Android smartphone from Google," writes Eric Zeman of Information Week.

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