Facebook Q2 2012 Earnings Meet Analyst Predictions, But Shares Plummet
July 27, 2012 11:29 AM
comment(s) - last by
Facebook posted $1.18 billion in Q2 2012 revenues and a net loss of $157 million (8 cents per share)
Facebook's first financial earnings report since going public in May was pretty good, but failed to impress investors. The social networking giant posted $1.18 billion in Q2 2012 revenues, which was a 32 percent jump from Q2 2011. This figure modestly passed analyst expectations of $1.15 billion in revenues.
However, Facebook did report a net loss of $157 million (8 cents per share), which fell from $240 million (11 cents per share) in Q2 2011. This was likely due to the $1.3 billion the company paid in compensation regarding stock-based pay after the initial public offering (IPO) in May.
After adjusting to figures to exclude those costs, Facebook earned a profit of 12 cents per share, which was right in line with analyst expectations.
Facebook shares are currently
down over 12% to $23.45
, which is roughly 40 percent below the initial
IPO price of $38 per share
"Our goal is to help every person stay connected and every product they use be a great social experience," said Mark Zuckerberg, Facebook CEO. "That's why we're so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends."
Facebook CEO Mark Zuckerberg [Image Source: Associated Press]
Facebook's IPO in May was the largest,
valuing the social giant at over $100 billion
. However, the situation took a dive when shares were trading way below their initial price. In just a two-day span after the company went public, its shares plunged a total of 19 percent.
Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are being sued in a Manhattan federal court by investors who claim that they were lied to about Facebook revenue forecasts before purchasing stock. Other underwriters, like Bank of America Corp. and Barclays PLC, as well as Facebook executives, are being sued as well.
According to reports, underwriters had like Morgan Stanley had selectively shared Facebook estimates, leaving out certain details that would have possibly changed investors' minds. Morgan Stanley reportedly cut its revenue forecasts for Facebook only days before the IPO launched, yet failed to let investors in on the changes. This
from the U.S. Securities and Exchange Commission (SEC) as well as the Financial Industry Regulatory Authority (FINRA).
While Facebook may be having some financial issues right now, it's looking ahead to new ventures that could potentially help the company. For instance, it was reported yesterday that
a new Facebook phone is expected to launch in mid 2013
. However, Facebook CEO Mark Zuckerberg
shot down those reports in an
The goal is to make money on mobile phone advertisements since Facebook had $3.15 billion in total advertising sales last year, but none of this came from ads on mobile devices.
This article is over a month old, voting and posting comments is disabled
7/27/2012 1:24:50 PM
Apple also paid emphasis on its products when SJ was on board but it worked out well for them.
"Vista runs on Atom ... It's just no one uses it". -- Intel CEO Paul Otellini
Facebook Smartphone to be Released in Mid 2013
July 26, 2012, 5:40 PM
FINRA, SEC to Investigate First-Day Facebook Stock Problems
May 23, 2012, 3:46 PM
Facebook Shares Will Open at $38 USD
May 17, 2012, 6:20 PM
Facebook IPO Exceeds $100 Billion Mark
May 15, 2012, 10:37 AM
Google Street View and reCAPTCHA Get Smarter with New Algorithm
April 17, 2014, 9:02 AM
Mt. Gox CEO Refuses to Come to the U.S. in Financial Crimes Probe
April 16, 2014, 3:50 PM
Mark Zuckerberg: Facebook Home Reception Slower than Expected, Social Graph Will Pick Up
April 16, 2014, 2:00 PM
FBI's Facial Recognition Database to Have 52 Million Criminal, Non-Criminal Photos by 2015
April 15, 2014, 2:56 PM
Microsoft's Anti-Google "Scroogled" Campaign May Have Ended
April 15, 2014, 2:44 PM
FAA Requiring All Flights to Have GPS Tracking System by 2020
April 15, 2014, 1:25 PM
Most Popular Articles
Cities to Carpoolers: Sharing Your Car is Illegal, We Will Seize Your Cars
April 4, 2014, 9:17 PM
Taiwan's AOU Claims to Have World's Highest-Res. OLED Smartphone Display
April 11, 2014, 1:44 PM
iPad Exploiter is Freed by Federal Appeals Court
April 11, 2014, 7:40 PM
It's Very Likely Neanderthals and Humans Had Sex, Produced Offspring
April 10, 2014, 8:40 PM
A-10 Warthog May Live to Fight Another Day with Support from Lawmakers
April 14, 2014, 9:41 AM
Latest Blog Posts
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information