Facebook Inc (NASDAQ:FB) is set to release its next earnings report on Wednesday after closing bell, and on average, analysts are expecting adjusted earnings of 97 cents per share on $6.9 billion in revenue. Analysts say that their checks on advertising spend on Facebook Inc (NASDAQ:FB) during the third quarter were generally positive. Also Google’s strong digital ad revenue results bode well for the social network.

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What to expect in Facebook’s earnings report

RBC Capital Markets analyst Mark Mahaney expects $6.99 billion in revenue, $4.02 billion in non-GAAP EBIT and $1.03 per share in non-GAAP earnings. Consensus for non-GAAP EBIT stands at $3.8 billion. Mahaney is looking for a 58% year over year increase in ad revenue.

The analyst notes that Facebook Inc (NASDAQ:FB)’s traffic trends during the third quarter were rather negative. The social network saw a 2-point deterioration in U.S. Multi-Platform traffic trends according to comScore, leading to a 4% year over year decline on what should have been a 1-point easier comparison. The social network’s total minutes per user declined 11 points to a 14% year over year reduction, although he adds that this metric was up against a more difficult comparison. Global desktop traffic declined 2% year over year in July and August.

Mahaney estimates that Facebook Inc (NASDAQ:FB)’s monthly active user base grew 13% year over year, bringing it to 1.75 billion. He believes the daily to monthly active user ratio grew sequentially to 66.1%, marking a quarter over quarter improvement of 20 basis points.

In-line spending on Facebook

Susquehanna analyst Shyam Patil said in his earnings preview note that spending checks were Facebook Inc (NASDAQ:FB) suggest that the company’s results will be mostly in line. He said core Facebook Inc (NASDAQ:FB) spend rose somewhere in the 30% to 40% range year over year during the third quarter. Most checks suggested some deceleration, and the analyst said there was some seasonality associated with the summer months, but he thinks that was related to certain categories.

His checks also suggested that slower ad load growth will push prices higher. His checks also suggested that the company’s aggressive initiatives off of its core platform, like Audience Network, should help it increase its inventory without boosting the ad load on its O&O properties.

The analyst added that momentum at Instagram looks to be “leveling off,” although he suggests that this might be design. His checks indicated that as a percentage of Facebook Inc (NASDAQ:FB) budgets, Instagram seems to be leveling off at 10% to 15%. One reason that was given was the fact that engagement options on the photo sharing platform are more limited. Also ads on the platform apparently don’t perform as well as they do on the core platform. Patil suggests that Facebook Inc (NASDAQ:FB) designed it this way to limit ads because of concerns about Millennial engagement on its properties.

Google’s strong results point to strength at Facebook

Cantor Fitzgerald analyst Youssef Squali expects a strong quarter from Facebook Inc (NASDAQ:FB) because of how well Google parent Alphabet did during the September quarter. His checks showed that demand for social ads was very strong, and he noted that Merkle set ad spend growth for Facebook Inc (NASDAQ:FB) at 63% in the third quarter. Kenshoo reported the same metric at 45%, and Squali said strength seems to be covering both brand and direct response advertising.

The analyst projects that Facebook Inc (NASDAQ:FB)’s mobile ad revenue jumped 72.8% year over year to reach $5.793 billion, with contributions from mobile ads rising over the mid-80% range. He expects a 6.4% decline in desktop ad revenue, bringing it to $886 million.

Shares of Facebook Inc (NASDAQ:FB) stock slumped by as much as 1.45% to $129.09 during regular trading hours on Tuesday.