tv Closing Bell With Maria Bartiromo CNBC October 18, 2012 4:00pm-5:00pm EDT
google. they're going to get on the call with analysts and investors at 4:30 p.m. eastern time. we will take that call live for you so you can hear what went on today. also, just moments away from microsoft reporting its earnings. we've had a handful of technology companies missing earnings estimates pretty badly. ibm losing some ground in the last couple trading sessions on the heel of its revenue miss. we have a distinguished panel to take us through these big stories. gene muenster of piper jaffray with me. our very own john fort. good to see you, gentlemen. thank you for joining us. ben pace, let me kick this off with you. when you see a specific story like what happened today in google and you put it into the overall economy and the landscape that we're talking about, which of course has been weak for technology earnings, what does it tell you? >> well, tii think it just tell us to be a little cautious here. we're at highs. we've been trading in a trading range since the qe-infinity
announcement in mid-september. i think the bar had been set low for third quarter earnings based on second quarter earnings and the summer economic slowdown. but it is sector by sector. you've seen some weakness in technology. the financial earnings were okay. the consumer earnings seem to be okay. we're only about a fifth of the way through. but it's a continuing trend of low growth rate of earnings, maybe even negative this quarter. more importantly, disappointments in revenues. with margins as high as they are, it's going to be hard to see earnings growth be much more than single digit over the next 12 months with that kind of revenue growth. >> yeah, the revenue certainly has been the issue. david, what do you think about these misses in technology recently? we're waiting on microsoft. the estimates call for a profit of 56 cents a share on revenue of $16.42 billion in revenue. what are you looking at in terms of this slowdown in technology? what do you think that tells us about where we are? >> well, there's definitely an economic slowdown. it is different in technology for different companies.
for instance, in google, the worrisome thing is like facebook, as you move from pc desk tops to mobile and more people are doing searches on their phones, you get less revenue per click. that was the metric that really hurt google this quarter. 15% year over year decline in the revenue per click. if it's really a secular trend to mobile, that's bad. in ibm's case, it was the services that ibm provided and corporate spending has really been pulled in. it's different for each of these companies. in microsoft's case, we clearly know there's a pc slowdown. the only difference is microsoft is at a 30% discount to the s&p valuation. it's pretty much assuming bad news right now. >> david, i have the microsoft numbers. 65 cents a share is what they're reporting. that looks better than the estimates, although the stock is trading -- well, right mnow it'
moving up. 65 cents a share of revenue and $17.6 billion. this is a fiscal first quarter. this looks like a much better than expected number here. the estimates called for revenue of $16.42 billion. we have revenue actual of $17.36 billion. the earnings are 65 cents a share versus the estimate of 56 cents a share. any thoughts here, comments on that quarter? j gene muenster? >> well, i don't cover microsoft, but i would say it wasn't a big debacle like it was with google. at the end of the day, microsoft is a very different business model, but it's notice to see the tech giants aren't falling apart. >> you know, there are adjusted numbers as well. we want to peel the onion back on this and make sure we're looking at the right numbers. initially the stock looked like it traded down. it is actually trading higher here. john fort has the latest in terms of more headlines out of the microsoft quarter.
over to you, john. >> yeah, maria, i'd want to defer to a couple analysts you have on for exact interpretation of these numbers. the headline numbers straight across for revenue is $16.01 billion. of course, you have deferred revenue for the windows upgrade offer, windows 8 presales, et cetera. it comes up to $17.36 billion. i want to be sure we're comparing apples there as far as analyst expectations. >> exactly. it seems to be a lot of adjustments and noise in this report in terms of what the numbers actually are. david, let me get your take on the microsoft quarter here based on what you just heard. >> again, expectations are low and frankly, this quarter is not going to be the reason to own or not own microsoft. we're waiting for windows 8, which is really the issue. just like with google, you wonder about the future, if everyone is using mobility to do
searches. with microsoft, people just don't believe you're going to use windows in the future. windows 8 has been designed to be on tablets and phones. they have a particular opportunity in tablets for business people who want to run office, the real microsoft office, on a tablet and have a built-in keyboard. i think that's the big mover. as long as this quarter was profitable, which is obviously was, and was around expectations, i think that's great. the stock has almost a 3% dividend while you wait. the big bet is that windows 8 will be reasonably successful. i think, frankly, they can be number two to the ipad in tab bet because they have a particularly attractive offering to people who want to create documents, which is the one thing that was lacking in the ipad. >> as a chief investment officer, ben, when you look at sort of what we've been seeing in technology, does it worry you that things are slowing down and the revenue keeps coming in light? >> well, i think the offset,
maria, is you're starting to see a little bit of a pickup in other sectors of the economy. you're seeing a pickup in housing, pickup in retail sales, a little bit of a decrease in unemployment. i think there might be a bit of an justioffset there to offset slowdown we've seen globally, which obviously impacts technology, may impact industrials. it's really confirmation of a slow growth environment that will continue into the rest of 2012 and 2013. >> what snaps us out of it? what snaps us out of this malaise we're in? businesses are not spending the money they're sitting on. how do we get out of this? >> well, we've got monetary ease, right? but we really have the fiscal issues and this whole concept in the states of the fiscal cliff and any kind of clarity that businesses could get around regulation, tax policy. the businesses have the money. we've talked about that for almost all year. it's just they have to have the catalyst to spend it. once they do, i think capital
spending could be a big catalyst into next year. you need that clarity. so far it's really not there. a lot of businessmen talk about that. >> what about -- gene muenster, we're waiting on the google conference call. it's happening in about 20 minutes. we're going to take this call live for the audience given the debacle that went on today. what can you tell us in terms of what you're expecting out of ma management on that call? >> the two key items, first, what's going on in mobile. that was a disappointment. at what point is that going to see some lift? a couple conference calls ago, google basically said don't worry about t we have it under control. i think investors are interested now, are worrying about it. separately, the core. google.com and youtube, that's their core business, was up 14% year over year. last quarter was up the 21%. this has been a total roller coaster. google doesn't give guidance. to the extent they can at least help us understand how to think
about the core growth, that would be very valuable. >> okay. so that's really what probably the analysts are going to be focusing on as well given the fact we saw that miss in terms of search. on microsoft, you know, it's interesting to see that microsoft actually beats the estimates, even with this noise in terms of deferred revenue. we're looking at a like ly b here. it has been showing the effects of this slowing economy, right, gene? >> yeah, i mean, it has. the fact that they're able to do that, i think microsoft, like we were talking about, has its own issues. i think the windows os needs to probably competitively rethink how they're going to approach the world in a mobile world in a decade. but you have to give microsoft credit for holding it together against some really tough technology trends that have been working against the company. >> and i guess this uncertainty over the fiscal cliff, and we're going to have more on this
coming up in the program, is also keeping managers very much sitting on their cash. isn't that right, ben? when i asked you when is this going to loosen up, i'm wondering if after the election we have more clarity. >> that's one of the things we're worried about, why we're being a little cautious here. a lotxpected of this lame duck congress. that's going cause a lot of concern, a lot of angst as we get to year end in the markets. >> right. and microsoft is expecting to defer for the second quarter revenue. again, we're getting headlines in terms of the revenue deferrals happening because of the windows upgrade. gentlemen, thank you very much. see you soon. appreciate your time tonight. keep it right here. we have a lot more ahead on this very busy edition of the "closing bell."
stay with us. coming up, google's big goof. the latest news from the internet giant's untimely release of earnings and big stock hit. plus, live coverage of the company's conference call at 4:30. that's all ahead on the "closing bell." ... what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ... nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this.
welcome back. no doubt the blame game is in full play today with google pinpointing r.r. donnelley for releasing earnings early. take a look at how it's taking a toll on the stock. google shares finished down 8%. reaction to all of this from one of the most well-known businessmen in the world, donald trump, joining me now on the telephone. donald, good to talk with you. >> hello, maria. >> google one of the most widely held stocks among retail investors. what do you think this does? does this further erode confidence in wall street? >> well, it's very unusual because they've done so many things right and done such a great job. i look at google maps all the time. i'm in the real estate business. they've done such a good job. my daughter's a friend of some of the top people at google. i have to tell you, i think it's an amazing group of people.
i know them, and i think it's really an amazing company. what happened today, it's a glitch. there's no question about it. >> right. all right. so if you're google, let's say you're google and r.r. donnelley messes up releasing these numbers and this happens. what do you say to r.r r.r. donnelley? >> well, you know, it all depends on the reason, and they haven't said the reason yet. they went very early. the numbers weren't what people thought they were going to be. it certainly had an impact. as wonderful as they are, they cannot handle this kind of a liability. i can't imagine you want to put them out of business. perhaps you say you're fired. >> that's what i was hoping -- that's what i was waiting for, donald. >> it just seems like a natural. i was sort of set up for that question, i think. >> you were set up. a huge company like google fumblings -- fumbles on earnings, what does it say about
everything else? >> the world is very complex. if you look at facebook, where i actually just went out and bought facebook. i think it was 19 something. i don't know if that's a good deal or a bad deal. i'm not sure what future it has. certainly it came down from 42. i guess it came out at 38 or 39, went up to 42 and crashed. i recently bought some facebook. you know, it's a crazy thing going on on wall street. you're seeing a thing like facebook, which was a total disaster. lots of bad things are happening out there. i think the worst thing is our leadership in washington. >> well, you were one of the headlines in that first debate. the president mentioned you. what did you make of that? >> well, i was greatly honored. i was very surprised and certainly greatly honored. i'm watching it, and i'm sort of thinking about other things. all the sudden i say, wait a minute, didn't he just mention my name? it was said with respect. i appreciated that. it was an honor. >> what did you think of the second debate, donald? >> i thought that certainly
obama did much better. i thought mitt romney won, but i thought obama did much, much better than he did in the first debate, which he had to, or we wouldn't have an election. it would be over. so he was much better than he was in the first debate. i thought mitt romney did very, very well. i thought he won the debate. >> we'll see about that. monday night's the last and final debate on foreign policy. donald, always great to talk with you. chbl >> thank you, maria. >> let's go to john fort. he has more on microsoft. what can you tell us about the numbers? >> yeah, first of all, i want to clarify. i know you and i are going back and forth a little bit about that deferred revenue question. turns out i'm hearing the number we should be paying attention to is $16.01 billion in revenue. that compares unfavorably to expectations of $16.42 billion. the eps of 53 cents versus 56 expected. going through some of the
divisions, i've got wells fargo's pencilled in expectations. they had revenue a little higher than actually came in. their numbers sort of match what the street might have been expecting by division. w windows and windows live came in around $3.2 billion. server and tools was also off a bit. online services was about in line with expectations. the business division a little bit weaker than expected. entertainment and devices did better than expected from what i can see. that's a little bit of how those numbers broke down, maria. >> all right. that explains the stock trading. initially going up and now seeing the stock is trading down. this is actually clearly a miss, john. >> yeah, it looks that way. with these deferred revenue issues where microsoft has set some money aside in previous quarters and then counted in future quarters when people are
able to upgrade to windows 8, that does make these numbers tricky. it appears that was the issue here. >> all right. we'll leave it there. thank you so much, john. we're looking at the stock down about 2% on microsoft. add microsoft to the list of technology companies that have reported light revenue and have given guidance that has sort of been underwhelming. we'll keep watching microsoft. certainly looks like technology has been the real loser in this third quarter reportings season. google about to tell the world exactly what went wrong in the wake of the double earnings blunder today. kayla is up next with the latest development. in ten minutes, we'll take you live to the google conference call. stick around. back in a moment. nsh bob...
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. dow industrial closing fractionally lower today. google under pressure, the story of the day. let's get to julia boorstin as we await this conference call for google. julia, over to you. >> that's right, maria. as we await google's conference call, i want to point out that facebook shares ended down 4.5% today. this is very much tied to google's disappointing earnings because they share the same problem. fast adoption of mobile devices is slowing their growth.
that's because both companies charge less for mobile ads, are making less money from mobile ads as they are from ads on the desk top. mobile ads are still a relatively new ad format for both google and microsoft. both companies have a lot to do in this area. the fact their users are spending so much more time on mobile devices is bad news for the bottom line. we saw with google that the cost per click was down 15% from a year earlier. it does seem like a lot of this can be tied back to that mobile growth. so fast mobile growth, slow revenue growth. maria? >> all right. thank you so much. facebook down 4.5%. great insights there. more on the story of the hour. we're minutes away from the google conference call. this coming after google finished the lay lower but off the lows. we head back to kayla. she has more on what she's going to be listening for out of that call. >> obviously everyone is going to be listening for larry page's take on what actually went on, but the truth of the matter is this sort of stuff happens all the time. it's not ideal, but it does
happen all the time. we saw about two years ago the same thing happened with disney. they took a 4% stock hit intraday. obviously, they bounced back. you can count dozens of companies that have accidently released their earnings, whether it was an employee misfiring or a third-party agent. this sort of stuff is something investors will eventually forget. the problem with announcing this sort of stuff early is analysts who have about an hour or less to prepare for these earnings calls now had more than half a day to pore through the numbers and really hit home on some of the big issues. currency issues with the overall growth of the economic environment slowing. adoption of mobile and how they're actually going to start monetizing that website again. maria, analysts have had an entire day to pick out exactly what they're going to hammer home to the company. >> all right, kayla. we're moments away. we'll get your insights after
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welcome back. the google conference call just moments away. we'll be bringing that call to you live. first, let's talk about the impact of what's happened today. gene, let's talk about what went on today. i recognize glitches happen. it was a mistake. but do you think there is any long-lasting damage to google in terms of its brand, in terms of the way they handled this? what's your take? >> i think people are going to forget about it by tomorrow. i mean, the reality is that this was probably the least likely company of any of our coverage companies to actually do something like this. i know google investor relations are meticulous. their i.r. people are good enough to be ceos of a lot of companies. this is not on google's hands. it's an unfortunate thing that happened, but investors realize that and are going to bget past it. >> what about the numbers actually, the business slowing down? do you see cracks in the armor
here? >> that's the real question. i think that there's not cracks in the armor. i think google's franchise is solidly intact. there's two themes that people are going to try to get their arms around. ultimately, it's not cracks in the armor, but it is impacting how analysts are going to model google in the december quarter and in 2013. those we've talked a lot about it mobile and how that influences the amount they get paid on each click. separately, and this kind of plays into mobile too, but how people are using apps. maybe in replacement of doing google searches. for example, you might have a yelp app and search for a restaurant through that versus going to google. i think those are some of the trends that as i've talked to investors today, the questions they're asking about longer term is more trying to understand how mobile is going to influence google's business over the next several years. that's less about what's going on today, more about these thematic shifts in terms of how people are using the internet. >> and let me ask you if this is a google issue or just broadly
speaking an internet issue, the industry issue. >> it is. it's an internet issue. obviously, facebook, that was the big problem that they had right out of the gate. not monetizing mobile enough. if you listened to the ebay call last night, they talked a lot about mobile. really, for a company to be relevant, for an internet company to be relevant, they have to have a great mobile strategy. it's a whole different game. there's different technology. obviously, a different user experience. your location plays into that. all internet companies need to be not only socially relevant but mobilely relevant too. >> julia boorstin, kayla, jump in here. what's the answer to things slowing down? do you think they'll say, look, this is an industry issue and things have slowed down and folks' behaviors are different in terms of accessing the internet? >> maria, i think if they were
smarkts a smart, and this is google, they would deflect attention away from the slow growth and say, hey, we always wanted to be a hardware business. these are the innovative projects we have in the pipeline. here's when we expect motorola to really make a difference on our bottom line. i think they should not spend much time on really important things that are important to analysts like mobile, like monetization, like cost per click, like currencies. the thing is, those are things of the past. this is a company that likes to focus on things in its pipeline and the way it's differentiating itself from other companies. >> all right. we want to take you to the call right now. the director of investor relations is speaking, jane penner. let's listen in. >> also, as you know, we distribute our earnings release
through our investor relations website located at investor.google.com. please refer to our ir website for our earnings. this call is also being web cast from investor.google.com. a replay of the call will be available on our website later today. let me quickly cover the safe harbor. some of the statements we make today may be considered forward looking, including -- >> we're going to go back when they actually get to business. gene muenster, interesting in that room. a lot of people wondering why so far we haven't heard from larry page, the ceo, thooern statement. what are you expecting in terms of larry page's participation? >> he's probably not going to be on the call. he's had some voice issues. there's been talk that he was seen publicly, i think, more recently in the last couple days at an industry event and that he looked fine. so that always comes up, what's going on with larry.
we've been reassured by google that everything is fine with him. it's just a voice issue. >> i see. okay. it's interesting that, you know, he doesn't typically do the calls anyway, though it, right? isn't that a fact? >> i think, you know, since he's been ceo, that's hit and miss. sometimes he's on, sometimes he's not. there hasn't been a real good trend on that. obviously eric schmidt was the key person. >> okay. all right. here's larry page right now. let's listen to what he's saying. >> here you go, larry. >> thank you. hello, everyone. thanks for joining us. it's great to be on the call today and to share our progress since we last spoke six months ago. as you can hear, my voice is still hoarse. i'll keep my remarks reasonably short. i'm sorry for the scramble
earlier today. as our printers have said, they had sent the release just a bit early. we had a strong quarter. i'm really happy with our business. revenue was up 45% year on year and at just 14 years old, we cleared our first $14 billion revenue quarter. not bad for a teenager. today we live in the world of abundance. abundant information and abundant computing. most of us carry at least one device all the time every day. in fact, many of us feel naked without our smart phone. mobile commerce and mobile search queries are growing dramatically across the world. when we use these devices interchangeably, depending on
our situation. i switch between my nexus phone, my nexus 7 tablet and my new chrome book we just announced today many times every day. all this abundance causes disruption. it also creates amazing opportunity. google is super well-placed to take advantage of these disruptive opportunities. why? because our search query volumes have grown this quarter as measured year over year. we're seeing tremendous innovation in advertising, which i believe will help us monetize mobile queries more effectively. indeed, our mobile monetization per query is already a significant fraction compared to desk top. in short, as we transition from one screen to multiscreens, google has enormous
opportunities to innovate and drive ever higher monetization, just like search in 2000. we took a big cut on android back in 2005. we believe that aligning standards around an open sourced operating system would drive innovation across the industry. most people thought we were nuts. ted, there are over half a billion android devices. half a billion. with 1.3 million more being activated every day. you should all run out and buy the nexus 7 tablets for $199. it's had rave reviews and recently won gadget of the year from t-3, the gadget experts. i love the integration with google play. it's an amazing device.
this time last year, i announced that our run rates for mobile advertising hit $2.5 billion. that seemed like a pretty big number, even for google. now when we've built up additional mobile revenue from users paying for content and apps in google play, including these new sources, i can announce our new run rate for mobile is now over $8 billion. that's quite a business. we have so many opportunities today that unless we prioritize, we spread ourselves too thin. last month we had another 19 products. we've now closed or have combined 60 products and features in the last year. and we put a ton of energy into ensuring that our remaining
products work really well together. as screens multiply, it's more important than ever we converge our services. users want one consistent, beautiful, and simple google experience. technology should do all the hard work. liberating users to get on with the important things that matter in their lives, and the screen independence is at the core of our strategy. take chrome and android for example. we only launched in february, but the experience is already ama amazing. with you're using chrome, switching devices is truly painless. all your tabs are there, ready to go. search on your desk top, and the result is right there on your smart phone. you can even click the back button, and it just works. as more users upgrade to google
plus, it's now over 400 million users enjoying amazing experiences across devices like instant photo upload. in the same way, we want to make advertising super simple for customers. online advertising has developed in very device-specific ways. with separate campaigns for desk top and mobile. this make arduous work for advertisers and agencies and means mobile opportunities often get missed. while we're working to significantly simplify the campaign experience, we're working very hard on that. advertisers should be free to think about their audience while we do the hard work of dynamically adopting their campaigns across devices. i'm very excited about this.
i talk at the start about the abundance of information. in the early days of google, you would type in a query, we would return ten blue links, and you move on fairly aptly. today you expect more. expect google to understand deeply. and you expect us to turn your intentions into actions in the blink of an eye. do a search for tom hanks movies. chances are you want leninks wi tom hanks movies. right from the results page, clean, fast, and organized. if you're shopping, say, for ugg boots, we now give you pictures, details about the boots, prices and information about the local inventory. again, right from the results
page. clean, fast, and organized. there's much more we can do to get you the right information at just the right time. you might have a really important event in the city. perhaps a first date. the traffic is bad. you need to leave early to avoid being late. maybe you just landed in a new country and you're at the airport atm trying to figure out how much cash to withdrawal. google now, which we launched on android in june, gives you all that information and more automatically with zero effort required on your part. these kind of tips and recommendations are super powerful. they really save users time and hassle. this is why i'm incredibly excited about the opportunities
ahead. given our expertise in search and mobile and our track record in monetizing and such products. every day, i wake up and i'm delighted our opportunities keep growing. and we create products that are defining the future. it's a truly exciting time to be at google. now we'll hear from patrick with some details about our quarter. >> thanks, larry. good afternoon, everyone. thank you for joining us. overall, we're very pleased with the growth trajectory of our business this quarter. this, in fact, despite significant currency fluctuations in many of our international markets. for example, if currencies had remained constant year over year, our consolidated revenue growth would actually have been 6% higher. on a positive note, our u.s. growth continues to be strong.
as larry noted, we had a great quarter on the product front, gaining traction in a number of critical areas. so before i dive into the financials, i just want to give you a bit more detail on the new $8 billion annual mobile run rate that larry mentioned. the new run rate is different from the one we gave you a year ago, and more specifically, last year it included only our gross revenue for mobile ads, but this year in this new number, we also added the gross revenue from the mobile sales of google play content and finally, it also includes the consumer spending on the play apps. so with that -- >> all right. management there at google going through line by line in terms of the quarter. we're going to get back to it once the q&a begins and certainly continue following it offline. when something happens that could be quite impactful, we'll take you back there live. we'll take a short break and get
back to the google call. up next, are solid numbers on mortgage refis masking what would be a last lucklackluster market? we have wall street's top money pros. we'll tell you what will move your money first thing tomorrow morning. you're watching the "closing bell" on cnbc. stay with us. everyone in the nicu, all the nurses wanted to watch him when he was there 118 days. everything that you thought was important to you changes in light of having a child that needs you every moment.
release. now we get instant reaction. gene, let me get your first reaction to what we heard so far out of google. >> well, i have to give larry credit for getting on the call. >> you're right. >> it was pretty painful listening to it. so credit where it's due. separately, that mobile number, the $8 billion mobile number, that's a critical number. if we look back a year ago, they're adjusting that number, as they said, as peter said. it's probably up about 90% year over year. that's kind of how it's tracking. units are tracking up 65%. what does all of that mean? they're clearly making a lot of progress on mobile. the question then comes back to how much of that is at the expense of desk top? how much are they cannibalizing desk top for mobile? the good news is they are being successful in mobile. i think ultimately, that's a little bit of a sigh of relief for investors, is that they're almost doubling that mobile revenue. >> yeah, great insights.
julia, what did you known? >> i have an update on youtube. we haven't been talking about this, but youtube was down temporarily just moments before that earnings call. we have -- and of course people were very upset about that. it was the hot topic of conversation on twitter. youtube released a statement saying servers failed thursday afternoon making the website and its videos temporarily unavailable, saying the down time sent people into a panic. youtube weighing in on this. obviously this is bad timing. very bad timing for google. >> let me just point out that the early google filing was human error, according to r.r. donnelley ceo. they said the filing was human error. the admission coming from donnelley there. julia, any thoughts on that? you had the youtube mention. any other comment from the ceo you're seeing? >> no, i'm not seeing anything right now. we've just been monitoring this call.
i think it's worth noting on the call here that larry page did acknowledge what happened. he said he was sorry for the scramble earlier today. but then he really moved on. he wasn't really talking about the fact that there was a disappointment here. in fact, he used the term super multiple times in his comments saying things were going well. he was very pleased with the results. page really did try to pivot away from the chaos of that early release and also from the disappointment in the fact the stock plummeted so much. i think he was obviously trying to put a positive spin on everything, stressing the opportunity in mobile, though, of course, as gene mentioned, that does seem to be challenging the business right now. >> kayla, what are you seeing? >> i think he did mention that $8 billion runway in mobile right now. we're hearing the company's svp talking about exactly what that means and how they're going to get there. i thought it was notable that he mentioned that the company had rommed out 60 products in the last year, pointing to new products that are on the android ecosystem like google money,
which launched in the last year. he also made a really funny comment about how mobile is challenging, but he encourages everyone to run out and get google's new tablet, which you can buy for just $199. amid everything that's happened today, page still in good spirits and not talking much about the heart of the of the numbers, but the future for the company and what lays ahead. >> yeah, it's a good point. the filing obviously, we assumed it was human error. we're getting that from the r. donnelly ceo. from this call, you're seeing money moving into the stock, in the extended hours here. is this the right call? do you want to buy this stock based on what you heard? >> well, yeah, i think if you have an outlook of a year and beyond, absolutely, i think the stock is going to rebound a little bit here, there's still some questions about this exchange from desktop to mobil and the cannibalization. i think if you got a long term outlook, it's a great time to
own google. i don't see any urgency to own it tonight. >> we know that things have slowed down. even if the business is vibrant following their commentary here. we know that things have in fact slowed. >> exactly. and, you know, if you look at the street numbers, they're probably too high for next year, so let's kind of wait and see how all that shakes out. >> yeah, okay. so the shares have traded off in the extended hours, you're seeing a trade at 700 on the stock. it was down 8%. closing off of the lows of the afternoon after that halt. julia. thoughts on what this does longer term in terms of the brand and in terms of investor reaction? >> well, i think gene pointed out earlier that google does have a really top investor relations team. i think that google's going to have to let this down. just reacting on what happened
with facebook on its first day of trading, it taints the bland and frustrate investors and concern them. i think there's going to be more attention over the long term in what's going on internally and with this mobile issue. this is an issue that's going to plague all of the internet stocks. it's going to be a challenge for zynga, groupon, any of these companies that are seeing the shift to mobile. >> thanks so much, everybody. we'll see you a little later. we're going to take a short break. the ceo is here next with the reaction to the google mess if his company uses r donnelly. what's next?
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happening in extended hours on chipotle. >> they reported earnings after hours, it's quarterly profits up $2.27 per share. hoer's a big kicker, though, store sales only rising 4.8%. not too long ago, this number used to be in the double-digits. further concerns around a decline in customer traffic that's why we're seeing the stock plunge in after hours. >> thank you very much. >> bb & t got hammered today after third quarter earnings, that's despite reporting a 28% increase in profits, fuelled by mortgage banking revenue, which was up 71% for the bank stock nonetheless, down about 7%. joining us now is kelly king. chairman and ceo of bb & t corporation. good to have you on the program. thanks so much for joining us. >> thanks, glad to be with you. >> if you'll indulge us, and if
you can speak about what happened today on google, we just learned r donnelly ceo came out and is admitting this was human error. >> with regard to our case, our 8 k's, we handled that ourselves, it's obviously extremely time sensitive. we did not use an outside firm for that. we control that ourselves. >> when it comes to the sensitivity of earnings, you're controlling that, you soften, you're not using donnelly for that. have you ever had any issues with donnelly on any other releases? >> no, we've used them for a long time. for the appropriate releases, and they're great company. we've never had any issues. a large company like we are. you have employees from time to time, people make mistakes, you
apologize, you move on. i wouldn't draw any big conclusions about r donnelley because of this itself. >> thank you so much. let me ask you about the quarter, profits were up, you missed expectations, stock was hit hard, what went on there? >> an unusual quarter for us, maria, there was a little bit of movement on the consensus. the consensus was low. 70 or 71, depending on which organization you listen to. so we had 66 on gap. we had six cents in unusual items. depending on how you do that, many people said our core was 70, 71 or 72. i wouldn't describe it as a clear miss. it depends on your determination. different people look at it differently. we had a really good quarter. you said earnings were up really good. long growth was up, you know, 9.5%.
our revenue year to date, include i including bank handling was up. you recall we bought colonial several years ago. when you require those institutions. you end up with what's called a lot of acredible yield. and so in the early part of those portfolios, you earn a lot of money, and then the yield just starts winding down as the loans pay off. it's very expected. but what we try to do, we try to give forward for the next quarter, net interest market guidance. we have a very strong margin for this quarter, 394. we did guide the analysts down to the mid 370s for the fourth quarter. that's just a mathematical extrapolation of what's going to happen to those changes. and so the markets looked at that and said, well, the markets are going to be lower, they
factored that into expected earni earnings. they overreacted some. it was because of margin. >> understood, because beyond that, it looked like a strong quarter. good to have you on the program. thanks so much. >> thank you. >> we appreciate it. and we'll see you soon. that will do it for "closing bell." stay with us, more on google on "fast money" right now. live from the nasdaq market in new york city's times square. in for melissa lee. let's get to the story of the day. dragging the nasdaq and broad indexes lower as well. the conference call is still underway. julia bors ten joins us with what the company is saying. >> larry page kicked off the call. he sounded very hoarse, he has been struggling with that issue with his voice. he