The biggest bad news for Google: Motorola’s $527M Q3 operating loss kneecapped its earnings

Google-owned Motorola lost $527 million in Q3. Its mobile segment lost the lion’s share of that, shedding $505 million or, roughly, a cool half billion. As Google notes in its leaked earnings release, the company was -20% on its total revenues for the third quarter.

And it’s hardly better on a GAAP basis, in which the company still lost 6% of its revenues.

Now, there was a special cost in the third quarter for Motorola – costs associated with “restructuring and related charges” – of $349 million, so we might not expect Motorola to lose a full half billion every quarter. Still, the company, now a part of Google, certainly is a black mark on an otherwise fairly decent earnings report.

Here’s the comparison of Google:

Google Operating Income – GAAP operating income for Google was $3.26 billion, or 28% of Google revenues, in the third quarter of 2012. This compares to GAAP operating income of $3.06 billion, or 31% of Google revenues, in the third quarter of 2011. Non-GAAP operating income in the third quarter of 2012 was $3.95 billion, or 34% of Google revenues. This compares to non-GAAP operating income of $3.63 billion in the third quarter of 2011, or 37% of Google revenues.

And Motorola:

Motorola Operating Loss – GAAP operating loss for Motorola was $527 million ($505 million for the mobile segment and $22 million for the home segment), or -20% of Motorola revenues in the third quarter of 2012. Non-GAAP operating loss for Motorola in the third quarter of 2012 was $151 million, or -6% of Motorola revenues.

Now, if you subtract the two, $3.26 billion and $527 million, you get a remainder of about $2.73 billion, which is nearly exactly what Google reported for its quarterly operating income:

GAAP operating income in the third quarter of 2012 was $2.74 billion, or 19% of revenues.

As TNW noted, that GAAP operating income as a percentage of its revenues is down – down sharply, from the its year ago Q3:

This compares to GAAP operating income of $3.06 billion, or 31% of revenues, in the third quarter of 2011.

The cause? As we have shown, is Motorola. Therefore, Motorola is not simply a minor speck in the Google sea of cash, this quarter it was a rampaging elephant in what was once a rather pristine tea shop. Crash.

Assuming that Google had simply not purchased the mobile phone giant – reeling giant, more – the company would have had a slow quarter, with operating income ticking up a few hundred million dollars. Not great for a technology company that hasn’t hit full Microsoft-maturity, but nothing like the carnage that we have seen today.

Image Credit: Spencer Platt/Getty Images