When Facebook Inc (NASDAQ:FB) releases the results from its first quarter, Wall Street is going to be expecting a lot. The social network has been posting significant growth over the last year or so, and investors will expect that to continue. The main catalyst for Facebook has been its earnings report, so investors stand to gain or lose a lot, depending on what those results are.
If Facebook’s results are in line with expectations
Wall Street’s general consensus indicates that analysts are expecting earnings of 24 cents per share on revenue of $2.34 billion for the quarter. A post by Jeff Reeves on The Slant at Investor Place suggests that simply meeting expectations probably won’t be enough to keep investors happy with Facebook Inc (NASDAQ:FB). After all, shares have skyrocketed, climbing 120% over the last 12 months. So the social network is probably going to have to really wow investors to keep its stock racing upwards.
Providing investors with eye-popping numbers means going beyond just growth, as the social network has been showing no signs of slowing down in this department. Wall Street’s general consensus indicates that analysts are expecting earnings of 24 cents per share on revenue of $2.35 billion for the quarter.
Wall Street’s expectations indicate that investors are looking for more than 60% year over year revenue growth, although it would be a slight decline sequentially. If Facebook Inc (NASDAQ:FB) hits the 24 cents per share in earnings, then it would be about double what the company posted in the same quarter last year.
Facebook’s revenue may be the key metric
Reeves suggests that the main number investors will be watching next week in Facebook Inc (NASDAQ:FB)’s results is revenue. Wall Street will be especially impressed if the social network manages to report growth rather than the small month over month decline analysts are expecting. However, if sales slow down more than expected, this could be seen as a major negative for the company, particularly if the social network fails to impress on the other numbers.
The author admits that his predictions for Facebook Inc (NASDAQ:FB) haven’t exactly turned out to be accurate in the past. This time around though, he thinks that the social network’s earnings report won’t move the needle too much because they will be about what Wall Street is expecting.