Google Warns Investors Before Earnings Release
Google (NASDAQ:GOOG) will announce its fourth-quarter results after the bell on Tuesday, and expectations appear increasingly bearish. Shares sweat off nearly $30 last week following a blog post from Brent Callinicos, who is vice president, treasurer, and chief accountant at Google, that argued analyst expectations might not be in line with the reality.
Callinicos spells out that Google’s pending sale of Motorola Home, the division that makes set-top TV boxes, classifies the unit as a discontinued operation, removing it from fourth-quarter results. “While this is a standard accounting treatment,” said Callinicos, “people who follow our company may not be fully aware of how it impacts our financial reporting. For example, as of this writing, a majority of Wall Street analysts who cover Google have not reflected the Home business as discontinued operations in their estimates.”
Google’s chief accountant is probably worried that Google’s earnings will appear weaker than they actually are if compared against unrealistic expectations. The usual result is selling pressure as investors re-consider their valuation of the company. Understandably, Google, which is already shedding dollars ahead of its release, wants to minimize any disappointment…