Facebook Earnings: Here’s Why Shares are Falling

Facebook, Inc. (NASDAQ:FB) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Despite the strong numbers, shares are down 1.86%.

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Facebook, Inc. Earnings Cheat Sheet

Results: Net income dipped to $64 million (3 cents per diluted share) in the quarter versus a net gain of $205 million in the year-earlier quarter.

Revenue: Rose 40.14% to $1.59 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Facebook, Inc. reported adjusted net income of 17 cents per share. By that measure, the company beat the mean analyst estimate of $0.15. It beat the average revenue estimate of $1.53 billion.

Quoting Management: “In 2012, we connected over a billion people and became a mobile company,” said Mark Zuckerberg, Facebook founder and CEO…

…We enter 2013 with good momentum and will continue to invest to achieve our mission and become a stronger, more valuable company.”

“We started off the year with no ads on mobile, and we ended with 23% of ad revenue coming from mobile in the fourth quarter….Ads in News Feed barely affected the engagement level, Zuckerberg said. “The numbers turned out better than we expected…Now we have this News Feed ads business that we’ve barely tuned.”

Key Stats:

Revenue increased 25.59% from $1.26 billion in the previous quarter. Net income increased to $736 million in the quarter versus a net loss of $59 million in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.14 and has not changed. For the current year, the average estimate is a profit of $0.52, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials.)