Facebook Posts Loss, Shares Tank

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Facebook Posts Loss, Shares Tank

On Thursday, Facebook Inc (NASDAQ:FB) released its highly-anticipated second quarter earnings. It reported a $157 million loss.

The company’s $0.08 per share loss compared to a net income of $240 million ($0.11 per share) from the previous year. Adjusted earnings for the second quarter were $295 million ($0.12 per share).

Revenue rose 32% to $1.18 billion, up from the previous year’s $895 million. This exceeded analysts expectations of $0.12 cents per share adjusted earnings.

Advertising revenue was $992 million; this was 84% of total revenue and it increased 28% from the previous year. Payments and other fees revenue in the quarter was $192 million.

On glaring figure from the release included second quarter costs and expenses at $1.93 billion, a 295% increase from the previous year. This has been attributed to a share-based compensation expense, according to the press release. Facebook had noted in its initial public offering prospectus that this expense from its pre-2011 restricted stock units (RSUs) had not been recognized prior to the IPO.

Mark Zuckerberg,  Facebook Inc (NASDAQ:FB) founder and CEO, said in the earnings release via the Wall Street Journal,  “Our goal is to help every person stay connected and every product they use be a great social experience. That’s why we’re so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends.”

Highlights from the second quarter included the following:

  • Facebook’s monthly active users increased 29% to 955 million from the previous year.
  • Daily active users averaged 552 million for June 2012, representing a 32% increase from the previous year.
  • Mobile active users rose 67 percent from the previous year to 543 million.

It’s been a rough ride for Facebook since it’s IPO. As of Thursday’s close at $26.84, its shares have plummeted 29% from the $38 IPO price on May 18.

In after-hours trading, Facebook’s shares continued declining and as of this writing had fallen 10.52% to $24.10. According to MarketWatch, Colin Sebastian of Robert W. Baird said with the lack of any forecast in the company’s earnings release, it was probably scaring investors that had already pushed the share price down more than 8% during Thursday’s regular trading session.

Not helping matters were the dismal second quarter earnings results from Zynga (NASDAQ:ZNGA). That stock took a huge beating on Thursday as it fell 37.48% to $3.17.

Sebastian added with regards to Facebook’s numbers. “It was a solid quarter given where expectations were,” and noted, that “not providing guidance may make investors nervous.”

At 5 p.m. ET, the company will hold a conference call with analysts. Stay tuned. This should be interesting.

Shares are plummetting after hours, down over 10%. The stock has reached a new low of $24.12 at the time of this writing.


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