Facebook Earnings Results: Still Not What Wall Street Wants

Mark Zuckerberg, chief executive officer and founder of Facebook Inc.David Paul Morris/Bloomberg *** Local Caption *** Mark Zuckerberg
David Paul Morris/Bloomberg
Investors looking for relief from the sting of buying Facebook (FB) around its IPO price will have to wait a while longer.

Shares of the social network briefly fell more than 1 percent in after-hours trading after the company reported slightly worse than expected earnings.

Facebook earned $0.12 a share in adjusted profits on $1.46 billion in revenue. Analysts were expecting $0.13 and $1.44 billion, respectively.

Without subtracting foreign exchange, stock-based compensation, and other one-time costs, Facebook earned $0.09 a share, or a penny better than the consensus data compiled by AOL DailyFinance. Revenue increased 38 percent year-over-year as Facebook's installed user base grew to 1.11 billion, up 23 percent over the same period.

Efforts to attract more mobile users also seem to be taking hold. More than 750 million people now access the social network via smart devices, up 54 percent year over year.

Instagram, the controversial photo network accessed via smart devices, reached 100 million active users who may soon see ads in their feeds. Revenue from mobile ads delivered via the Facebook app rose 30 percent.

That mobile momentum is coming at a good time. "Home," Facebook's social app layer for Android phones that some see as a shot across Google's (GOOG) bow, hasn't exactly been a hit among the tech-savvy. The better news for investors? Facebook is earning more from its business now than it did even one quarter ago:
Metric Q2 2012 Q3 2012 Q4 2102 Q1 2013
Revenue $1.18 billion $1.26 billion $1.58 billion $1.46 billion
Earnings Per Share ($0.08) ($0.02) $0.03 $0.09
Sources: AOL DailyFinance, Facebook, Facebook.

"We've made a lot of progress in the first few months of the year," said Facebook founder Mark Zuckerberg in a press release. "We have seen strong growth and engagement across our community and launched several exciting products."

He's no doubt right. Trouble is, investors and Wall Street -- which once regarded Facebook as a $100 billion enterprise -- are still looking for much more.

Motley Fool contributor Tim Beyers owned shares of Google at the time of publication. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google. For further analysis of the social network's mobile ambitions, try our newest premium research report in which we dissect Facebook's expanding empire and tell you whether there's reason to "like" the stock for your portfolio.

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May 02 2013 at 9:34 AM Report abuse rate up rate down Reply

I just signed up with FB 3 wks ago for the 1st time in my life and got blocked already. They're saying I may not be a real person or my account may be fake. What dafuq? I can't even get in to de-activate my account. They're requesting that I send them a copy of my govt. issued I.D. such as my Driver's License or Passport. Forget it. They can kiss my big toe. I'm sorry I ever signed up.

May 02 2013 at 1:47 AM Report abuse rate up rate down Reply

I wonder how many people will remain on facebook after they view their friends requests and see email addresses that are from their email address book?

I set up a facebook account and had various test email accounts.

I noticed those email addresses showed up as friends' requests.

They are scrubbing addresses through apps or plugins that web pages load.

May 01 2013 at 11:07 PM Report abuse rate up rate down Reply