Facebook Inc (NASDAQ:FB) will report Q3 earnings on October 23, after market close, and Wedbush Equity research analysts are optimistic that the company will outperform key consensus estimates, including revenue, while missing out on earnings per share (EPS). The social media giant has not had many favors in the recent past, with a wave of sell side analysts also turning against the stock’s future prospects.
Nonetheless, it seems as though the struggling social media company does find some comfort zone in the perceptions of some of the equity research analysts, and sell side analysts.
Facebook Inc (NASDAQ:FB) is expected to report a revised $1.26 billion worth of revenues for the third quarter of 2012, representing a 33.6% yoy growth rate. The revised estimate is above the consensus value of $1.226 billion, provided by Thomson First Call. However, the growth rate of 33.6%, falls below last year’s yoy rate of 88%.
The same trend should take effect in C4Q12, with the company realizing $1.455 billion in revenues, as compared to a consensus estimate of $1.433 billion. Full year results for 2012, are also expected to beat analyst (consensus) estimates of $4.909 billion, to report $4.957 billion, which is a margin of more than 10%.
Nonetheless, Wedbush’s revised estimates for the year 2013 still fall below the consensus estimates, although the company predicts the revenue to grow by 22.4%.
The company’s earnings per share are expected to be below the consensus estimate of $0.11 for the quarter, as it predicts a report of $0.10 per share. This trend is maintained through C4Q12, and 2013. The overall for the year will miss consensus estimate by $0.05 per share, despite the Equity research firm having revised its estimate to $0.43 from $0.41 per share.
Facebook Inc (NASDAQ:FB) will likely suffer a huge blow following the multiple lock-up releases, which will flood the market. The company’s employees and key executives are expected to sell some or all of their allocated stake, in an attempt to recoup some value from the stock, which at the moment, does not appear very attractive for people who bought it at a price of $38 per share.
Furthermore, the company’s revenue will be affected by its principal fees and payments, revenue generator’s woes. Zynga Inc (NASDAQ:ZNGA), which as per, Q2 results accounted for nearly 60% of Facebook’s non-ad revenue, has been facing a myriad of troubles in 2012. Facebook’s Q2 earnings can be used as a good case example of what is likely to happen, following Zynga’s poor performance.
When the gaming company (Zynga) reported a huge loss in Q2, Facebook followed shortly, with its own kind of disappointing results. It is inevitable to avoid a repeat of the same in Q3. Recently, Zynga, negatively pre-announced Q3 results, citing weakness in certain games within its Ville-style category. Zynga lowered FY:12 guidance once again.
With regard to revisions, Wedbush notes the following:
Full year revenue estimates are up to $4.96 billion, while the 2013 figure is estimated at $6.07 billion from $6.02 billion. Long-term, the analysts believe Facebook could generate $3- 4 billion in Targeted Ad revenue by 2015.
Additionally the analysts point to Facebook’s search engine plans, claiming that there is a great deal of opportunity in that business; although the social media giant does not seem to be putting too much emphasis on it, as compared to other areas of its business.
At the time of this writing, Facebook Inc (NASDAQ:FB) stock was trading at $20.43 per share up $0.95, or 4.88% increase from yesterday’s close.
