At least seven brokerages cut their price targets on Google Inc's shares after the company missed Wall Street earnings expectations, but analysts said growing mobile advertising revenue points to better times ahead.
The earnings report, released hours ahead of schedule due to an error on Thursday, revealed slowing sales in Google's core Internet advertising business.
The quarterly earnings missed expectations for the second time in a year but analysts said the decline was a short-term trade-off as mobile advertising revenue becomes a bigger part of its business.
Chief Executive Larry Page, speaking on an earnings call, said that Google's mobile business, which includes app sales and advertising, was now generating revenue at an annualized run rate of $8 billion, up from about $2.5 billion last year.
"This run-rate speaks to how GOOG has positioned itself to win regardless of platform," Nomura Equity Research's Brian Nowak wrote in a note, although he cut his price target on the stock to $840 from $900 because of the short-term outlook.
Google shares closed down 8 percent at $694.37 on Thursday. The stock was up 1 percent at $700 in premarket trading on Friday.
Piper Jaffray & Co, RBC Capital Markets, Raymond James, Robert W. Baird & Co, Susquehanna Financial Group, BMO Capital Markets and Evercore Partners also lowered their outlook on the Google stock by an average of $44.14.
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