Friday, July 27, 2012

Earnings Shakers: Facebook Inc (NASDAQ:FB) & Expedia Inc (NASDAQ:EXPE)

Shares of Facebook Inc (NASDAQ:FB) are posting their  biggest intraday fall, since  their  May stock market debut, in today’s session with the stock tumbling over 15%  to $22.82 an all-time low and briefly created an all time low of $22.28 earlier in the session.

The world’s largest social networking site failed to convince its investors that it had the potential to monetize its humongous user base of close to a billion, especially in the mobile  segment.

Get Complete Insight About FB’s Earnings Here

The company swung to a net loss in its first reported earnings after going public in May, mainly due to higher costs related to its IPO. What’s worrying investors is that the company didn’t provide enough details about its future monetization plans as users are quickly shifting to mobile devices where the company has failed to earn sufficient advertising revenues. Although, the company’s CEO Mark Zuckerberg remarked that "Mobile is a huge opportunity for Facebook,” that was not enough for the analyst community. But that was not enough as we all know there would be more and more Smartphone users going forward (thanks to Apple Inc.).

The key question is how would the company be able to earn from increased mobile users. In the second quarter, the company did fairly well, compared to analysts’ estimate, with earnings  coming in at $1.12 a share on a revenue of $1.18 billion.

As we all know, investors don’t like uncertainty and in case of Facebook, there are several questions remained unanswered and that has clearly been reflected in today’s session as investors are dumping their holdings.

Can FB Fall Below $20 Mark? Get Trend Analysis

On the other hand, Expedia Inc(NASDAQ:EXPE) share are popping up quite smartly as the company unexpectedly reported much higher adjusted earnings revenue despite the fact that the company Internet travel portal had boosted its tech spending heavily.

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On back of strong earnings, the company decided to lift its full year revenue and earnings guidance. The company now projects to report high single-digit percentage with the possibility of low double-digit growth, compared to previously guided mid-single-digit percentage growth in April.

For the second quarter, the company earned $105.2 million, or 76 cents a share with revenue growth of 14% year over year to $1.04 billion. Adjusted earnings stood at 89 cents a share, topping analysts’ target of 71 cents, with revenue of $990 million. Shares of the company soared 27% to $58.11 on heavy volume.

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