Facebook is Getting Slaughtered
As of 10:30am Facebook (FB) stock is being slaughtered by 14% based on the weaker than expected earnings release yesterday. Here is a quick rundown on the results.
- Revenue of $1.18 billion vs. $1.147 billion consensus.
- EPS of $0.12 vs. $0.12 consensus.
- Advertising revenues were $992 million versus a $921 million consensus
What would concern me as a Facebook investor (which I am not currently) is the “net loss of $157M or 8 cents a share, and profit excluding certain costs of 12 cents a share.” The key is understanding what the “certain costs” were that comprised .20/share difference between .12/profit and the .08/share lost and whether or not those costs were one time write-offs versus ongoing/recurring operations expenses. For Facebook, Mobile growth strategy execution will be the difference between survival / thriving or becoming the next MySpace which is why Instagram acquisition fetched such a hefty premium. Google+ is a serious threat IMHO.