Google and IBM quarterly results 'disappoint'

(AFP/Ryan Anson)

Fears that the technology sector is overheating grew last night as Google and IBM posted disappointing quarterly results.

Google shares tumbled after the company’s results missed analyst forecasts during the first three months of the year.

Although profits were $3.45 billion (£2.05 billion), the average “cost per click” was down 9% from a year earlier, raising concerns about future advertising revenues. It was also hit by the discounted sale of Motorola Mobility to Lenovo in the period for $3 billion, having spent $12.5 billion on the smartphone maker in May 2012.

Meanwhile, IBM reported its lowest quarterly revenue in five years, down 4% to $22.5 billion, because of weak hardware sales.

Both results come after investors turned their backs on companies like Amazon and Yahoo! at the start of the week. Stock market listings by firms like King, creator of Candy Crush, have fared badly.