New York - Facebook is reporting stronger-than-expected
revenue in the social media company's first earnings report since its rocky
initial public offering two months ago.
But investors weren't impressed and after a brief spike, its
stock tumbled nearly 9% in after-hours trading.
Facebook said on Thursday that it booked a net loss of
$157m, or 8 cents per share in the April-June period, mainly due to stock
compensation expenses following its IPO.
That compares with earnings of $240m,
or 11c/share, in the second quarter a year ago.
Revenue grew 32% to $1.18bn from $895m a year ago.
Adjusted earnings of $295m, or 12c/share, matched
Wall Street's expectations.
Analysts, on average had expected slightly lower revenue of
$1.16bn, according to FactSet.
The results come two months after Facebook's stock landed
with a thud on its first trading day, on May 18. The day began with glitches
with the Nasdaq stock market that delayed trading by half an hour.
It didn't
get much better from there. Despite months of hoopla that had investors
thinking it would soar, the stock closed just 23c above its $38 IPO price.
It has not reached that level since then.
Though as its first public report, Facebook had a lot riding
on this quarter, Wall Street's expectations were muted, which could be a reason
for the stock price decline.
Facebook had effectively warned investors before its IPO that Wall Street's expectations were too high. In a filing issued a week before its IPO, Facebook said its mobile users are growing at a faster pace than the number of ads on its mobile platform.
Analysts took that as a sign that their estimates were out
of whack and many of them reduced their estimates for Facebook's projected
revenue and earnings.
That said, Facebook didn't start showing ads on its mobile
app until this spring. While it's true that it was late to the game - after
all, its mobile user base is growing fast - it doesn't mean it won't be able to
in the future.
Overall, Facebook said its revenue from advertising totalled
$992m, representing 84% of total revenue and a 28% increase from the same quarter
last year. It did not say what percentage was from mobile.
Facebook said it had 955 million active monthly users as of
June 30, up 29% from a year earlier.
Facebook's stock fell $2.38, or 8.9% to $24.47 in after-hours trading.
