August 4, 2022

Facebook Earnings Met with Skepticism

Facebook earnings
(Photo credit: Wikipedia)

Menlo Park, CaliforniaFacebook earnings are turning heads, and not for a good reason. The internet’s largest social network is expected to post a 43 percent growth in its year-over-year advertising revenues, but investors and analysts are still exhibiting low confidence.

Facebook earnings might show a rise but that hasn’t changed the fact the social media site’s shares have remained stagnant since its last report. And the lack of movement is having a demonstrable impact on the market, as investor apathy continues to permeate through the stock.

Facebook Earnings in Hard Numbers

As far as future projections, the social network is forecast to put up $1.44 billion in revenue, and bump adjusted earnings up by $0.13 when it releases its first quarter report on Wednesday after the closing bell rings. Goldman Sachs is predicting that Facebook earnings will reach a price of $40 per share and expects the social site to grow its mobile revenue up to an impressive $382 million, which would record a 25 percent increase over the previous quarter.

Should the social network meet Goldman Sachs’ projections, it would post $1.25 billion for the quarter in total revenue from all its properties. What’s more, EMarketer is predicting that Facebook will take a 30 percent share of the mobile ad market this year.

Addressing Market Concerns

Mobile has long been the Achilles heel of Facebook earnings, as industry experts and market analysts have noted the company’s past inability to effectively monetize its mobile presence.

“Facebook has, so far, effectively addressed one of the most significant overhangs from its IPO days, the lack of Mobile monetization. Mobile Advertising Revenue is now showing significant growth and becoming a material part of the overall Advertising Revenue mix,” RBC Analyst Mark Mahaney wrote in note published Monday on Facebook.

Indeed, the company has made great strides recently, which have included an overhaul of its news feed and an aggressive foray into the smartphone market. Other changes have included the addition of a mood feature as well as its expansion with the purchase of Parse.

Despite these efforts, Facebook earnings have failed to impress over the past 90 days. The social network appears to be on a path that’s unsure, at least for the foreseeable future.

Facebook earnings
Facebook spent most of November, December, and January climbing into the $30s, but the past 90 days haven’t been as kind to the social network’s market value. (Credit: Yahoo)
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