Zynga’s (NASDAQ:ZNGA) second quarter faux pas is now history, but Pac Crest questions whether it took part in some pre-IPO financial machinations that pushed its game monetization up to unsustainable levels so as to make its offering more attractive. At any rate, monetization has shrunk, and the analyst believes that Zynga will have to increase spending to sets things right. A problem with that is that research and development already comprise 52 percent of revenue.
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Facebook (NASDAQ:FB) shares are down Friday after meeting understated estimates along with reporting significant slumps in payments growth, Western user growth, and domestic advertising impressions, plus large spending rises. So far, analysts remain more positive than not (which did not happen with Zynga). Needham predicts that mobile monetization should improve as advertisers become more used to the platform. Goldman believes that advertising costs per impressions will grow by 10 percent this year and 13 percent in 2013. Topeka points out Facebook’s rising average revenue per user and success with Sponsored Stories. However, Barclays is displeased with the lack of second half guidance, and Capstone still frets over declining growth in Facebook’s most accretive markets.
Shares of Amazon.com, Inc. (NASDAQ:AMZN) climb strongly post-earnings, as an increasing gross margin outweighs worries regarding top-line weakness and aggressive spending. Margin gains are now accruing from the increasing sales of e-books, Amazon Web Services server/storage capacity, and third-party merchandise. Goldman forecasts that these trends will lead to Amazon’s operating margin bottoming later in 2012, and hitting 3.7 percent next year.
A123 Systems, Inc. (NASDAQ:AONE) shares collapse Friday, subsequent to word that Qualcomm Chief Executive Paul Jacobs has stepped down from the company’s board, a move which he explained was to focus more on his day job. In view of A123’s dubious financial position, it could be that investors are looking for an excuse to get out.
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