Facebook beats the street with ease
Facebook posted revenue that easily beat analysts’ expectations for the quarter, despite controversies over ‘fake news’. Ad revenue was up by a dizzying 51% from the same quarter a year ago, and the company added 80 million monthly users over the past three months. Nonetheless, the company’s share price fell on the back of the news. This is largely due to a new reporting structure that sees it fail to disclose adjusted expenses, income, tax rate and earnings per share. However, investors should be wary of reading too much into this drop: taken over the course of the year, the company is performing incredibly well.
Despite the drop, Facebook’s share price is still up 32%, year-to-date
SOURCE: Yahoo Finance
Speaking to the new reporting format, Facebook’s chief financial officer, David Wehner, made the following comment on Wednesday’s conference call: "Given that stock is an important part of our compensation structure, we believe that investors should focus on our financial performance with stock-based compensation included."
Whether that causes discomfort for some analysts or not, it can’t take the shine off the extent to which Facebook hammered expectations in the last quarter. The company posted GAAP earnings per share of $1.04 against expectations of $0.87. It posted revenue of $8.03 billion against expectations of $7.84 billion. It reported 1.94 billion monthly active users against expectations of 1.91 billion. And it reported 1.28 billion daily active users against the 1.26 billion that Wall Street forecast.
In a rather downbeat reaction to this win, the company’s founder and CEO, Mark Zuckerberg, said in a statement: “We had a good start to 2017. We’re continuing to build tools to support a strong global community.”
Dominion holds Facebook in its Global Trends Ecommerce Fund.
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