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 3:45:00 PM
I know its luster has worn off for me i never found it to be a useful communication medium coupeld with the fact that i am not really interested in the lives of the people i went to high school with 20 years ago. All Facebook is now i a giant shared vanity site and a place to share LOL cats and Jesus loves you images. I have been thinking about bagging it for some time now.
"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
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
Quick Note: Amazon UK Offers £10 Back on Any Order £50 or Over
August 3, 2015, 12:05 PM
Editorial: Reddit Allows Itself to be Hijacked as a Hate Platform For Racist Bigots
July 21, 2015, 6:32 PM
Mozilla and Facebook to Adobe: It's Time to Kill Flash
July 20, 2015, 6:30 PM
Instagram Bans "Curvy" From Hashtag Searches, Provokes "Plus Sized" Outrage
July 16, 2015, 1:20 PM
Mozilla Promise Punctual Windows 10 Firefox Release, Teases at iOS Arrival
July 7, 2015, 3:08 PM
Netflix Announces 7-to-1 Stock Split, Eyes Explosive Overseas Growth
June 23, 2015, 8:18 PM
Most Popular Articles
Microsoft's Windows 10 Leaves Lumia 530 Behind w/ 8 GB Storage Requirement
August 25, 2015, 4:02 PM
Kentucky Man Faces up to 10 Years in Prison for Shooting Drone Trespasser
August 13, 2015, 2:58 PM
Future of Lumia Uncertain as Microsoft Lays Off 2,300, Closes 1 of 3 Finnish Offices
August 24, 2015, 6:14 PM
Aluminum 7003, Used in Roofing, May be Tapped by Apple for iPhone 6S/6S+
August 24, 2015, 4:45 PM
Best Buy Rapidly Ramps up Apple Watch Rollout After "Strong" Early Sales
August 26, 2015, 11:42 AM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information