“Facebook’s first earnings report as a public company had solid numbers, but in the end it landed with a thud — much like its rocky initial public offering two months ago,” Barbara Ortutay reports for The Associated Press. “Facebook reported stronger-than-expected revenue and a gain in users Thursday. But investors weren’t impressed and after a brief spike, its stock fell more than 11%, or $2.965, to $23.88 in after-hours trading. The decline means Facebook stock (FB) will most likely open at its lowest level since going public.”
Ortutay reports, “It’s another big disappointment for the Harvard-born company that was supposed to usher in the next Internet boom… What may have rattled investors is that Facebook’s revenue growth has slowed. Between 2009 and 2010, the company’s revenue nearly tripled. In the first quarter of this year, revenue climbed 44%. In the second quarter, Facebook’s revenue increased 32% to $1.18 billion from $895 million a year earlier. Analysts, on average had expected slightly lower revenue of $1.16 billion, according to FactSet.”
“For a freshly public company such as Facebook, the decelerating revenue growth is a concern. A bet on fast-growing revenue is the reason investors are willing to value new companies highly even if they are not making a profit. Another reason jittery investors may be even more nervous: Facebook didn’t offer investors and financial analysts its outlook for the rest of the year,” Ortutay reports. “Overall the Menlo Park, California-based company posted a loss of $157 million, or 8 cents per share in the April-June period, mainly due to compensation expenses it incurred when it paid $1.3 billion in restricted stock and related taxes for employees as part of the IPO. The loss compared with earnings of $240 million, or 11 cents per share, in the second quarter a year ago. The company’s adjusted earnings of $295 million, or 12 cents per share, matched Wall Street’s expectations.”
Much more in the full article here.
MacDailyNews Take: Apple has yet to turn on the iOS and OS X spigots for Facebook. They’ll do so this autumn. When Apple integrated Twitter into iOS, Twitter’s user signups skyrocketed.
[Thanks to MacDailyNews Reader “abcd” for the heads up.]
Related articles:
Why did Facebook integration disappear from Apple’s OS X Mountain Lion until ‘this fall?’ – July 26, 2012
Google+ nabs top spot in customer satisfaction survey; Facebook falls – July 18, 2012
Apple friends Facebook at WWDC, hits Google where it hurts – June 12, 2012
Apple shows off iOS 6 with all new Maps, Siri features, Facebook integration, Shared Photo Streams via iCloud, and more – June 11, 2012
Twitter unveils sweeping redesign; says iOS integration has boosted signups by 25% – December 9, 2011
i don’t use Facebook. it is for old people. i don’t use twitter. it is for the mtv generation.
I hate to tell you but the MTV generation is in their late 40’s and 50’s, when MTV was actually “Music Television”. If I had to classify what that station is now it would be more like….IMTV (Immature Television). Do they even play music or music video’s?
But, I will agree that Facebook is old and really it was designed as a desktop social thing. Unfortunately the world is going mobile and I just don’t see FB transitioning over into mobile as well. Twitter is perfect for mobile and by FB’s own admission, they haven’t really transitioned yet. I expect thier stock to hit $13-$14 dollars before it stops sliding.
Lol good one
MDN Take, it’s true. Apple is probably the last big bump Facebook can expect.
Not sure why investors were expecting more from them this quarter. Most people are now on Facebook (emerging markets excepted). And Facebook hasnt figured out how to properly monetize their user base. Where will the revenue growth come from?
The display ads aren’t bad, but people aren’t on there to click in the ads (unlike AdWords, where that’s exactly why they’re there). And there’s nothing on mobile.
On the other hand, Facebook knows more really valuable things about us in terms of demographics, interests, pinpoint location, occupation, etc. If they ever figure out a good way to leverage all that to generate revenue, I’ll buy the stock.
I’ve always found facebook strange in a gaudy tacky way. Myspace 2.0
There is no other way but down for it. It does nothing unique. The only thing it has going for it was it’s trendiness, and that is always only a fleeting moment.
Facebook is bad. Apple should not go there.
FaceBook will be around for a long time just like Windows. I think it attracts the same user base as Windows and will have a similar stock price profile as Microsoft. There will always be a place for mediocrity in the world, just not my world.
True. After all, Myspace is still out there.
Limping.
Friendster used to limp. And then it just laid there.
Seems that Facebook is just another case of Wall Street insiders plucking the pigeons. I sure hope nobody here bought the stock.
I sure hope nobody here bought the stock.
Thank you @stlentz for being a kind and caring soul. Echoed here.
If Google and Amazon exist why not Facebook, Amazon made 1 cents per share and had its profit go down 96% this quarter and yet the stock when up 15 dollars today, Google brought a company (Motorola) that is on its way towards losing 1 billion dollars a year and Google has said 7 billion of the 12.5 billion price of buying Motorola was for nothing yet Apple and Google traded places in stock price (a swing of 50 dollars) in the last week, if Amazon and Google, can exist why not Facebook? Amazon and Jeff Bezo’s just burns me up (A Master of True Smoke and Mirrors).