A loss in the
second quarter, slowing revenue growth and share compensation costs sent social
network, Facebook
Inc's (NASDAQ:FB) shares plunging, after the company announced its first-ever
results.
The stock
extended losses to below $23.50 in pre-market activity after closing down 8.5
percent at $26.84 on Thursday, declining over 38 percent from its debut in May.
The company also did not offer any future guidance, disappointing investor
expectations and eroding confidence.
Get Complete
Insight About FB’s Earnings Here
Facebook
reported net loss of $157 million, or 8 cents a share, in the second quarter
its bottom-line hit by stock compensation charges incurred by its IPO. In the
year-ago period the company had reported net income of $240 million, or 11
cents. Eliminating one time charges, Facebook said it earned 12 cents a share, matching
analysts’ forecast.
Revenue in the
three months ended June 30 was $1.18 billion, compared to $895 million in the
year-ago quarter.
Monthly active
users rose to 955 million at the end of June from 901 million in March. But
with more users migrating to mobile devices there has been a surge in mobile
users, rising 67 percent on year to 543 million users.
While mobile
user base has seen a steep increase, mobile advertising has not kept pace with
it, adding to investor concerns about the company being able to sustain its
revenue growth. Analysts have also been questioning its valuation and feel that
the plunging shares reflect the reality of the company's intrinsic value.
Can Fb Fall
Below $20 Mark? Get
Trend Analysis
Chief Executive
Mark Zuckerberg commented that the company had a clear path to building a
strong mobile business, though he did not provide more details.
Since social
media companies have very few benchmarks, being a recent phenomenon, the
analyst community is also wondering how the company will be able to make money
from it billion or so users.
Facebook's
capital expenditures more than tripled to $413 million in the second quarter.
Bloomberg had
reported on Thursday that Facebook was working with HTC to build a smartphone
to take advantage of the popularity of mobiles. However Zuckerberg dashed these
hopes saying that it did not make sense for his company to get into hardware.
No comments:
Post a Comment