Facebook shares (NASDAQ: FB), after creating all the market buzz during its IPO in May, promising a spectacular growth story, tumbled on Thursday as company reported earnings that were in line with expectations but nowhere near the potential it projected.
Following the earnings report, shares of social networking giant plunged 8% in afterhours trading. On Friday, FB is likely to open at its lowest level since it started traded in public. So far the stock has lost about 1/3 of its IPO value.
Reporting its first ever quarterly results after being listed at NASDAQ, Facebook said that net loss stood at $157 million, mainly due to $1.3 billion in compensation expenses tied to stock-based compensation following the IPO. In the same period last year (April – June quarter), Facebook reported earnings of $240 million, or 11 cents per share.
For the quarter, revenue grew 32 percent to $1.18 billion from $895 million in the preceding year.
The company, however, after excluding those costs did generate a profit of $295 million or 12 cents per share.
Analysts Polled by Thomson Reuters forecasted sales of $1.15 billion and earnings (after omitting out the compensation charges) of 12 cents per share while analysts polled by FactSet Research forecasted revenues of $1.16 billion.
The company said that its revenue from advertising stood at $992 million, which represents 84 percent of total revenue and a 28 percent increase compared with the corresponding quarter of the last year. Facebook did not mention what percentage of the total revenue was generated through mobile.
Facebook said it had 955 million active monthly users as of June 30, an increase of 29 percent from a year earlier.
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