Facebook Inc (NASDAQ:FB) released earnings for the last three month of 2012 this afternoon after the market closed. The social networking company revealed earnings of $17 cents per share for the period and reported revenues of $1.59 billion. In after market trading, the market met the announcement with derision despite the beat. The stock was down more than 7% right after the announcement.
Analysts were expecting the company to reveal earnings per share of 14 cents, and revenue of $1.5 billion. The important factors in the earnings report are the growth of mobile monetization, the growth of mobile usage, the share from new ad formats, and the growth in user numbers. Facebook Inc (NASDAQ:FB) shares have seen a sustained rally in the new year in anticipation of this earnings report.
This is the first year that Facebook Inc. (NASDAQ:FB) has reported earnings as a public company, so any comparison to 2011 reports is imperfect. Notwithstanding, the company showed earnings of 9 cents per share for the same period in 2012, and recorded revenue of $1.1 billion for the period.
In the third quarter of 2012, the company earned 12 cents per share, and recorded the same number in its second quarter earnings. However, revenues are probably more important to Facebook Inc (NASDAQ:FB) investors. In the third quarter of 2012, Facebook recorded revenues of $1.26 billion, and in the second quarter of that year the company recorded revenues of $1.84 billion.
A report from BMO Capital markets, released a few hours before the publication of the Facebook Inc (NASDAQ:FB) report, undermined the reigning narrative about the firm's mobile problems. The BMO report said that it is more important for the company to keep advertisers happy across the board, and continue to innovate with advertising formats.
That report asserted that the most important indicators in today's reports are the increase in international average revenue per user, changes in payment revenues, and volume from the Facebook Ad Exchange (FBX). The report said the most important advances in the firm's business in the coming year will be the roll out of Facebook Gifts, and changes in its ad network platform.
The report from BMO Research puts a price target of $32 on the company, and rated it as outperform in the broader market, but just perform in the tech industry. The report said that though Facebook Inc shares were currently trading close to their twelve month target, they did not see the need to change it until after the earnings report had been published.
Facebook Inc (NASDAQ:FB) shares were trading at just over $31 before the market closed today, up a little over 1 percent during the trading day. the company has seen its shares shoot quickly upward in the first few weeks of 2013. Facebook investors have benefited from a 17 percent increase in the value of the stock.
Today's earnings report is just Facebook Inc (NASDAQ:FB)'s third delivered publicly, and it will be unlikely to change the minds of many investors, still cynical about the company after a disastrous IPO last Spring. The company is still trading well below the price it went public at last May, and when it might offer a return to investors who bought on Day 1 is anyone's guess.