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
Auction site eBay continues to impress investors, thanks in large part to the ongoing success of PayPal.
Late Wednesday, eBay reported better-than-expected earnings and revenue for its latest quarter. And while the company issued slightly weaker guidance for the current quarter, its full-year outlook was rosier.
Shares of eBay (EBAY) rallied nearly 4% to a new 52-week high Thursday. The stock has been on a tear, soaring 41% over the past MORECatherine Tymkiw - Jan 17, 2013 12:22 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.
At one point this year, investors were assuming that the market for mobile devices and advertising began and ended with just two companies: Apple (AAPL) and Google (GOOG). They were the Home Depot and Lowe's of MOREPaul R. La Monica - Nov 29, 2012 12:41 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
Investors continued to punish Hewlett-Packard (HPQ) Thursday, a day after the company issued a grim outlook for 2013.
Hewlett-Packard extended the previous day's decline, after getting hammered on Wednesday. The stock has had a rough year, sinking more than 40% so far. That makes HP the worst Dow (INDU) performer by far this year.
In fact, it's been a tough couple of years for HP as the company struggles to stay MORECatherine Tymkiw - Oct 4, 2012 12:47 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
Dell is in a world of hurt.
The PC maker reported sales that missed forecasts and cut its outlook for the current quarter. The fact that Dell (DELL) beat earnings estimates was shrugged off by investors, who want to see the company ramp up its mobile efforts.
When it comes to the hottest mobile gadget, Apple (AAPL) is clearly the dominating force, with the iPad. Dell and its rival Hewlett-Packard (HPQ) need MORECatherine Tymkiw - Aug 22, 2012 11:10 AM ET
Sina Corp., which operates China's Twitter-like microblogging site Weibo, posted a surprise second-quarter profit of $33.2 million, more than triple the amount a year ago.
The results, which included an 11% jump in revenue, blew investors away since analysts had predicted that the company would post a slim loss for the quarter. Shares of Sina (SINA), surged 14% to their highest level since May.
Sina's CEO Charles Chao noted that Weibo, which MOREHibah Yousuf - Aug 16, 2012 3:22 PM ET
Not a member yet?Sign up now for a free account
|The Obamacare myth about small business|
|Make $30 an hour, no bachelor's degree required|
|Apple set for showdown on Capitol Hill over corporate taxes|
|Judge rules Airbnb illegal in New York City|
|JPMorgan's Dimon wins by a landslide|