FB’s un‘like’ly day
Stock price falls despite good news
Mark Zuckerberg’s Facebook soared past expectations for profit and revenue in the first quarter — but investors apparently wanted more.
Shares of the social network fell as much as 2.4 percent in after-hours trading, to $148.20, despite a bang-up quarter that saw revenue jump 49 percent and earnings per share spike 73 percent.
The Menlo Park, Calif., company reported EPS of $1.04, beating forecasts of 87 cents. Revenues came in at $8.03 billion.
“The revenue growth in the quarter is all the more remarkable considering the concerns that came to light late last year around mea- surement issues,” said Brian Wieser of the Pivotal Research Group.
Sure, growth may be slowing but Facebook reported the total of monthly average users had risen to an astounding 1.94 billion.
Perhaps investors got spooked by the company’s announcement earlier in the day that would hire 3,000 people to expedite the removal of uploaded videos of murder and suicide.
The announcement put the company’s sense of community on display, but also reminded investors of the gargantuan monitoring challenges Facebook faces.
Some analysts further believe the stock — up 27.5 percent this year — had simply gotten ahead of itself.
Another deterrent was CFO David Wehner’s repeating expectations on an earnings call for “ad revenue to come down meaningfully” in the second half of the year.
Wehner began sounding the alarm last November on grounds Facebook was nearing the ceiling for how many ads it could put before users without upsetting them.
If so, first-quarter data suggest it’s not there yet. Ad revenue rose 51 percent, to $7.86 billion, accounting for 98 percent of the corporate total.
CEO Zuckerberg repeated his vision, introduced at last month’s F8 Developer Conference, of transforming Facebook into a augmentedreality platform. “Creating the first open camera platform is a huge step forward, and we’re excited to keep pushing augmented reality forward,” he said.