Thursday, October 18, 2012

Facebook Inc (NASDAQ:FB): What To Expect On Earnings Day Amid Tech Slowdown?

Facebook Inc (NASDAQ:FB) which reports its third quarter results on October 23 is expected to post earnings of $0.11 per share on revenues of $1.23 billion.

The Street expects revenue guidance for the fourth quarter at $1.43 billion.

The Street will be expecting the management to provide more clarity on what the company plan to do with mobile monetisation and increase revenues from its vast population that has migrated to mobile devices.

Facebook usage on desktops has fallen while mobile usage has risen proportionately and continues to grow at high single digit figures, an indication that mobile migration has picked up pace and is happening faster.

Is FB a Buy Before The Earnings? Find Out Here

The social media network that reported its first public results after listing showed a slowing revenue growth while there were no initiatives to monetise its mobile user base.

Investors and analysts expect Facebook to place more emphasis on cross-platform analytics to deliver consistency and accurate measurements for marketers, Seeking Alpha said.

"This will allow Facebook to leverage its massive database of user information to explore advertising opportunities outside of the Facebook platform," it said.

Apart from ad revenues, the company will also be seeking to raise revenues from e-commerce that could be a potential opportunity for Facebook. The company has already started on this in a small way by launching Facebook Gifts, where users can buy and send gifts to their friends, directly from the platform.

Jiang Zhang, writing in Seeking Alpha, said that he maintained his price target of $25 and his equal-weight rating on the stock.

Shares of FB ended lower by 4.55%, pressured by surprised big earnings miss from Google Inc(NASDAQ:GOOG).

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