Facebook Shares Fall on Guidance, Higher Costs

Facebook reported quarterly earnings last Tuesday that beat analysts’ expectations. Revenue from advertising came in at $2.96 billion, up 64 per cent from a year ago. Total revenue for the quarter was $3.2 billion with earnings per share of 43 cents. This beat street estimates of earnings per share of 40 cents and $3.12 billion revenue estimates. Monthly active users increased to 1.35 billion, up from 1.19 billion a year ago.

A disappointing outlook for the fourth quarter caused investors to worry about margin sustainability. The company warned in the conference call that costs would rise dramatically in 2014 with revenue expected to slow in the fourth quarter. The firm projected that costs will increase between 50-70 percent next year as the company looks to invest in talent and new areas such as video.

Shares fell 10 percent in after hours trading.

Sources:

http://www.cnbc.com/id/102128719
http://blogs.wsj.com/moneybeat/2014/10/28/facebook-shares-slip-after-earnings-report-underwhelms/

By: Alex Serin

Advertisements
This entry was posted in Uncategorized and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s