Is Facebook, Inc. (FB) Winning Streak Coming To An End?

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Facebook, Inc. (NASDAQ:FB) Information Technology – Internet, Software & Services | Reports November 2, After Market Closes

Facebook 3Q Earnings – Key Takeaways

  • The Estimize consensus is calling for earnings per share of $1.03 on $7.02 billion, 5 cents higher than Wall Street on the bottom line and $100 million on the top
  • Mobile has been one Facebook’s fastest growing segments along with video, messenger, and Instagram
  • Facebook faces several near term threats mainly unrealistically high expectations that might not be met
  • What are you expecting for FB? Get your estimate in here!

Facebook is still one of the most impressive names in this space despite hitting some speed bumps recently. The social media company continues to top earnings and revenue expectations driven by strength in its mobile platform and strategic acquisitions. The upcoming quarter will feature early sales figures from Instagram, Messenger, WhatsApp and Oculus Rift amongst normal metrics from the bellwether Facebook brand.

Analysts at Estimize are calling for earnings of $1.03 per share, 78% higher than the same period last year. That forecast has increased 6% since Facebook’s second quarter report in late July. Revenue for the period is expected to jump 55% to $7.02 billion, marking 4 consecutive quarters of 50% growth. Shares are currently up 25% in 2016 and historically jump 5% immediately through the print.


Online and mobile advertising will continue be the focus of the upcoming quarterly release. In particular mobile ad revenue has become the mainstay of each earnings report, accounting for 84% of total ad revenue in the second quarter. Advertising revenue is typically tied to the number of daily and monthly active users recorded during the quarter. In the second quarter the company posted 1.13 billion DAUs and 1.71 billion MAUs, reflecting sharp increases from a year earlier. That number could see some pressure after it was revealed that Facebook was over inflating its video metrics. Meanwhile SnapChat is slowly emerging as a legitimate threat to Facebook’s core business. The Evan Spiegel run company currently boasts 60 million daily users in the U.S. and Canada, about a third of what Facebook has in these markets.

Beyond key ad revenue metrics, the upcoming quarter will highlight the performance of its other ventures. Facebook has only started to monetize Instagram’s ad platform which is expected to be a cash cow for Facebook. Outside of Instagram, investors will be looking at the progress from Messenger & Whatsapp, both of which have over 1 billion users.

Other important initiatives this quarter included the launch of its Marketplace strategy within the Facebook platform along with its new professional networking part of the site. Both are direct blows to companies like Craigslist, Yelp and Linkedin which provide comparable services. This should be a seamless process given its massive and highly engaged user base.

Despite all these catalysts, Facebook faces some near term threats that could hamper performance this quarter. Lofty expectations have been placed on Facebook to blow out its third quarter report that it’s only a matter of time that the company misses.


Do you think FB can beat estimates? There is still time to get your estimate in here!

Article by Estimize

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