• Wrap-up: Davos insights

    Alec Hogg speaks about the top three issues at this year's World Economic Forum.

  • Netflix and SA video

    Much of Netflix's potential impact on SA has already been made, says Arthur Goldstuck.

  • Fool's paradise

    Greece's new leader is in the same position as the ANC in 1994, says Leopold Scholtz.

Loading...
See More

Facebook revenue spike fails to impress

Jul 27 2012 10:37 AP

Related Articles

Value of Facebook 'likes' questioned

Social media blues

Nasdaq to reimburse Facebook investors

How low can Facebook go?

Facebook's stock falls below $30

Wall St gives Facebook cautious nod

 

New York - Facebook is reporting stronger-than-expected revenue in the social media company's first earnings report since its rocky initial public offering two months ago.

But investors weren't impressed and after a brief spike, its stock tumbled nearly 9% in after-hours trading.

Facebook said on Thursday that it booked a net loss of $157m, or 8 cents per share in the April-June period, mainly due to stock compensation expenses following its IPO.

That compares with earnings of $240m, or 11c/share, in the second quarter a year ago.

Revenue grew 32% to $1.18bn from $895m a year ago.

Adjusted earnings of $295m, or 12c/share, matched Wall Street's expectations.

Analysts, on average had expected slightly lower revenue of $1.16bn, according to FactSet.

The results come two months after Facebook's stock landed with a thud on its first trading day, on May 18. The day began with glitches with the Nasdaq stock market that delayed trading by half an hour.

It didn't get much better from there. Despite months of hoopla that had investors thinking it would soar, the stock closed just 23c above its $38 IPO price. It has not reached that level since then.

Though as its first public report, Facebook had a lot riding on this quarter, Wall Street's expectations were muted, which could be a reason for the stock price decline.

Facebook had effectively warned investors before its IPO that Wall Street's expectations were too high. In a filing issued a week before its IPO, Facebook said its mobile users are growing at a faster pace than the number of ads on its mobile platform.

Analysts took that as a sign that their estimates were out of whack and many of them reduced their estimates for Facebook's projected revenue and earnings.

That said, Facebook didn't start showing ads on its mobile app until this spring. While it's true that it was late to the game - after all, its mobile user base is growing fast - it doesn't mean it won't be able to in the future.

Overall, Facebook said its revenue from advertising totalled $992m, representing 84% of total revenue and a 28% increase from the same quarter last year. It did not say what percentage was from mobile.

Facebook said it had 955 million active monthly users as of June 30, up 29% from a year earlier.

Facebook's stock fell $2.38, or 8.9% to $24.47 in after-hours trading.

 
facebook

NEXT ON FIN24X

 

Latest Articles

8 simple ways to earn extra money Read More...
6 motivational tips to help you save this year Read More...
Invest for Income Read More...
15 Investment Tips for 2015 Read More...
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...