RR Donnelley blamed as premature Google filing wipes $20bn off shares
Friday, October 19, 2012
RR Donnelley has been blamed for an 8% plunge in Google's share price after the printer prematurely released the internet giant's third-quarter results showing a significant drop in profits.
The incomplete results statement revealed a 20% slide in Google's quarterly profits to $2.2bn (£1.4bn), missing analysts' estimates and sparking a flurry of trading that wiped nearly $20bn off the company's market value before trading was suspended.
Google placed the blame firmly on RR Donnelley in a statement released shortly after the blunder. It said: "Earlier this morning RR Donnelley, the financial printer, informed us that they had filed our draft 8K earnings statement without authorization.
"We have ceased trading on Nasdaq while we work to finalize the document. Once it’s finalized we will release our earnings, resume trading on NASDAQ and hold our earnings call as normal at 1:30 PM PT."
Tom Quinlan, chief executive of RR Donnelley told the Wall Street Journal that "human error" was responsible for the early SEC filing, which he added was "not common in our world".
One page of the financial press release still had space for a board level quote from Google chief executive Larry Page, which instead read: "PENDING LARRY QUOTE".
RR Donnelley, which files more than 100,000 documents each year, said in a statement that it would be investigating the situation.
Google shares dropped 8% to $695 (£433) on release of the financials that showed earnings of $9.03 per share, some way below analysts' estimates of $10.65. Page was forced to defend the results on a conference call, calling the three months a "strong quarter" in which revenues increased 51% to $11.3bn.Tweet