Facebook beat fourth-quarter earnings and revenue estimates, and improved mobile ad sales, but investors weren't all that impressed.
Facebook (FB) stock tanked 10% within minutes in after-hours trading following the earnings release. But the stock nearly fully recovered before edging lower again as CEO Mark Zuckerberg, CFO David Ebersman and COO Sheryl Sandberg answered questions from analysts on a conference call. Shares were down 4% at the conclusion of the call, trading just below $30 a piece. Facebook finished the day's regular trading up almost 1.5% to $31.24.
The results and the stock reaction lit up that other big social networking site: Twitter.
Revenue from mobile advertising represented about 23% of total ad revenue during the fourth quarter, the company said. That's an improvement from 14% in the third quarter. Prior to that, Facebook had practically no mobile revenue.
Though mobile advertising revenue increased, the growth of mobile users slowed. During the fourth quarter, monthly active users of Facebook's mobile app rose by 57%, down from a 61% growth rate in the third quarter and 67% in the second quarter.
crazy to see acceleration of mobile usage at $fb -- but growth rate of revenue per user is worrisome…—
Matt Lauzon (@mattlauzon) January 30, 2013
Still, Zuckerberg cemented the social network's direction, noting that "there is no argument today. Facebook is a mobile company." And he thinks that's a really good thing.
Zuckerberg: we'll be able to make more money from each minute people spend on mobile devices $FB—
Julia Boorstin (@JBoorstin) January 30, 2013
But some users quipped that Facebook's ad strategy could impact the overall user experience of the social network.
Can't wait till $FB is just one giant advertisement.—
Elvis Cake (@ElvisCake) January 30, 2013
$FB is AOL without subscription, just increasingly annoying ads that will slowly drive users away.—
Ryan (@MrRyanOz) January 30, 2013
While Facebook didn't provide formal guidance for the year, Ebersman warned that the company's expenses will rise throughout the year as it expands its workforce.
Ebersman: Plan to hire aggressively in 2013. Total expenses excluding stock comp will likely grow around 50% in 2013 $FB—
Chris Ciaccia (@Commodity_Bull) January 30, 2013
Ebersman also noted that Instagram, which Facebook purchased last year for $1 billion, is continuing to grow rapidly.
Ebersman running through financials, which don't include Instagram. He says Instagram is growing "at an impressive rate." $FB—
Julianne Pepitone (@julpepitone) January 30, 2013
Zuckerberg was also optimistic about the site's newer features, including Gifts and Graph Search, but doesn't expect them to be big money makers right away.
Zuckerberg: want to "temper expectations" for revenue from Graph Search, gifts $fb—
Erica Fink (@ericafink) January 30, 2013
Oh snap. Zuckerberg: "Our relationship with Google isn't one where the companies really talk." $FB—
Julianne Pepitone (@julpepitone) January 30, 2013
"I'm really happy with the partnership we have with them" -- Zuck, re: Apple. $FB—
Sam Gustin (@samgustin) January 30, 2013
Though Zuckerberg and team continued to stress the the company has improved and remains focused on its mobile strategy, Facebook shares declined 4% Wednesday evening.
keep talking zuck, wallstreet isnt buying what youre selling yet... $fb $$—
reuven ohr (@reuvenohr) January 30, 2013
But some investors are willing to sleep on it and wait to see how the stock performs Thursday.
Yikes $FB - This is why I dont mess with earnings. We shall see how this looks tomorrow morning—
Maximus Burns (@MaximusAnalysis) January 30, 2013
Facebook CEO Mark Zuckerberg announced a new search tool at a highly-anticipated press event Tuesday.
The new feature, dubbed "Graph Search," allows Facebook users to search their own network of connections for people, places, photos and interests that have been shared on Facebook. For example, users will be able to search for "friends who live in my city," "photos of the Eiffel Tower," or "music my friends like."
Facebook first announced the event last week, MOREHibah Yousuf - Jan 15, 2013 4:10 PM ET
Facebook (FB) stock rallied nearly 4% Wednesday, crossing $30 a share for the first time in six months.
The social network sent media invitations late Tuesday for an event at its Menlo Park, Calif. headquarters on January 15. The invitation called for reporters to "Come and see what we're building," fueling speculation that the company will make a major product announcement.
Hitting $30.28 Wednesday, the highest level since mid-July, shares of Facebook are MOREHibah Yousuf - Jan 9, 2013 12:48 PM ET
Facebook's stock surged more than 19% Wednesday, marking its best one-day gain since the company went public by far, as investors welcomed a healthy boost in sales.
The social media giant delivered third-quarter sales of almost $1.3 billion when it reported earnings after the closing bell Tuesday. That's up 24% from a year earlier.
In particular, investors were impressed by Facebook's ability to earn about $150 million from mobile, accounting for 14% MOREHibah Yousuf - Oct 24, 2012 4:01 PM ET
Since its botched initial public offering in May, investors have heatedly discussed the following question about Facebook (FB): How low can it go?
After surging last week to a recent high of above $23 a share from its all-time low of $17.55, it looked like the Facebook fans finally had reason to celebrate. But Facebook's stock plummeted more than 9% Monday after an article appeared in Barron's over the weekend which MOREMaureen Farrell - Sep 24, 2012 1:03 PM ET
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.
Facebook (FB) is on a tear lately. Shares are up about 17% since CEO Mark Zuckerberg spoke at the TechCrunch Disrupt conference last week and merely stated the obvious: that the performance of the stock after MOREPaul R. La Monica - Sep 20, 2012 1:05 PM ET
Facebook's stock rallied almost 8% and closed at a 1-month high Wednesday, a day after CEO Mark Zuckerberg took an upbeat tone during his first public appearance since the company's botched stock market debut in May.
"I am really optimistic about our mobile monetization strategy," Zuckerberg said during an interview with TechCrunch founder Michael Arrington at the tech blog's Disrupt conference in San Francisco Tuesday.
The CEO cited the social media platform's high volume MOREHibah Yousuf - Sep 12, 2012 4:04 PM ET
Shares of Facebook (FB) rebounded from an all-time low Wednesday, after CEO Mark Zuckerberg said he'd be holding onto his shares for at least a year.
Ever since Facebook went public in May, the stock has struggled to gain traction as investors worry about the social network's mobile strategy and how much pressure will come from the expiration of multiple lock-up periods (when insiders can sell their shares).
But after the market MOREMaureen Farrell - Sep 5, 2012 10:52 AM ET
Facebook is not very popular among investors these days. Shares of the social media giant hit a new low of just $19.82 Thursday, nearly 50% below their initial offering price.
The stock has been under pressure since last week, when Facebook (FB) reported its first earnings as a public company, and failed to relieve investor worries about slowing sales growth and its plan for mobile advertising.
As Facebook's stock continues to bleed, MOREHibah Yousuf - Aug 2, 2012 2:52 PM ET
Facebook will release its first earnings report as a public company a week from Thursday. Based on how the stock has done recently (and in the two months since making its debut), you'd think that the social network was the next Research in Motion (RIMM), Nokia (NOK), Yahoo (YHOO) or Hewlett-Packard (HPQ) ... you know, tech companies with really questionable futures.
Shares of Facebook (FB) are down more than 10% in MOREPaul R. La Monica - Jul 18, 2012 1:00 PM ET
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