Wednesday, August 1, 2012

Facebook Inc (NASDAQ:FB) is again bleeding, Shares hit new lows

Facebook Inc (NASDAQ:FB) is down 26% after reporting the first quarterly results post thee much hyped IPO. After one of the most hyped IPOs of the decade the Company had fallen around 20% on an estimate reduction by underwriter Morgan Stanley.

Such was the beginning of Facebook’s struggle that investors till date have not been able to regain their trust. Although, the Company had posted second quarter 2012 results as per analysts expectations but it did not provide any clear fiscal 2012 outlook and thereby failing to raise investor confidence.

Can FB Shares Rebound? Get Free Trend Analysis

 The social network site has been facing tremendous revenue pressure from the increased mobile usage and a positively related decrease in mobile revenue. FB had reported revenue of $1.18 billion in the second quarter posting a growth of 32.3% yoy with the revenue from advertising increasing 27.8% yoy on an increased ad pricing growth of 9% yoy. Ad pricing growth was much better than analyst expectations on the ramp in Sponsored Stories and News Feed ads, which drove higher conversion.

Total ad growth of 18% yoy attained by FB was still below the expected growth. Ad impressions continued to grow more slowly than users, largely due to increasing Facebook usage on mobile devices. Also, the total user engagement and growth has declined in the six months as compared to the last year.

R&D expense in the quarter were 13.5% of the total revenue increasing 150% yoy and is expected to increase in the coming periods as the Company invests more to increase its mobile revenues. Adjusted net income was $295 million or $0.12 per diluted share and Free Cash Flow at the end of the quarter was ($223) million.

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Worldwide Total Monthly Active Users for the quarter were 955 million growing only 29.2% yoy while Worldwide Mobile Monthly Active Users increased 67.1% yoy to 543 million. Payments & Other Fee Revenue per MAU increased 24.9% yoy to $0.20 while Total Revenue per MAU increased 2.4% to $1.24.

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