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Facebook Earnings Meet Expectations

Facebook's stock tumbles after 1st public quarter

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Facebook Earnings Meet Expectations

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Facebook debuted on the Nasdaq Stock Market on May 18 in New York. The social network site IPOed at a $100 billion valuation. Thursday was its first quarterly earnings report.

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Two months into public trading and Facebook shared its earnings with the financial world, garnering a collective "you don't say" because it came in with slightly higher revenue than anticipated.

The company had second-quarter earnings of a little more than 12 cents per share, with revenue of $1.18 billion.

"They didn't break any banks,'' Debra Aho Williamson, an analyst at research firm eMarketer told AP. "They did not come out any better than anybody had expected.''

Today's announcement aligns with the company's stance, given the company dampened expectations during its IPO period, saying Wall Street expected too much. Just this week, FB also had a marketing firm tell a story of the consumer- and brand-facing products that will keep the platform on the path to profitability.

Nonetheles, the share price fell 8 percent immediately following the news, taking it below $25 per.

On average, analysts were expecting Facebook to post earnings of 12 cents per share on revenue of $1.16 billion, according to a poll by FactSet. In all of 2011, it had net income of $1 billion and revenue of $3.71 billion, according to regulatory filings.

"People are waiting for a really huge growth moment in revenue, advertising, dollars per user,'' said Alex Ashby, research analyst at Global X Funds, a provider of a social media exchange-traded fund. "People had expected that Facebook is going to revolutionize advertising...we think it's still a definite possibility, but maybe further down the road.''

Facebook's revenue streams are advertising and its payment service -- skimming 30 percent of what users pay to play games, on Zynga, for instance.

Zynga's earnings report yesterday disappointed investors, taking its stock down in after-market trading. Zynga payments are 12 percent of Facebook's revenues.

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