Google CFO’s Remarks Hit Stock

Google Inc.’s chief financial officer raised the specter of slower earnings growth in a remark that soured recent investor enthusiasm, sending shares plummeting by as much as 13% on Tuesday.

Shares of the leading Internet search engine wound up shedding $27.76, or 7.1%, to $362.62. The stock, which went public 18 months ago at $85, peaked at $475.11 in January.

The latest in a series of abrupt downturns in Google’s stock followed Chief Financial Officer George Reyes’ answer to a question during an investor conference hosted by Merrill Lynch in New York.

After hailing the results of an 18-month effort to boost ad revenue, Reyes predicted that it would become more difficult for Mountain View, Calif.-based Google to maintain its rapid growth pace.

“Most of what’s left is just organic growth, which means you have to find ways to grow your traffic,” he said. “Clearly, our growth rates are slowing, and you see that each and every quarter.”

Reyes later put a more positive spin on his remarks.

“I think we have a lot of growth ahead of us,” he said near the end of a 45-minute session that was webcast. “I think it’s just a question of at what rate.”

The comments still spooked Wall Street, which had recently recovered from the disappointment of fourth-quarter results that provided a firsthand look at Google’s slackening growth.

Google’s shares plunged by as much as $51.87 after Reyes’ comments but recovered as investors digested his remarks.

Tuesday’s harsh backlash reminded investors of the volatility of Google’s stock, an offshoot of the company’s refusal to make financial projections or share many details about its strategy.