Facebook (FB) delivered mixed earnings results late Wednesday Yet the headline numbers don’t really capture the positive trends taking hold at the social network site. Here are five things you need to know from latest read on Facebook.
Key Numbers: First quarter revenue jumped 38% year-on-year to $1.46 billion, exceeding Wall Street expectations. Earnings narrowly missed the consensus estimate: up 7% to $219 million. Expenses shot up 60% in the period, driven by infrastructure investments at the site and increased headcount. Facebook shares, which touched a 52-week low of $17.55 back in September amid heavy short interest, have rebounded nicely to $27.43 as of May 1. However, the stock has fared less well vs. the S&P 500 Index so far this year.
After only one year, Instagram’s Android app has grown to account for almost half of the photo sharing app’s 100 million users, the company announced today. To compare, Instagram had 30 million users a year ago, when it launched its Android app. And that was only a few days before Facebook ended up buying the company for a whopping $1 billion.Facebook Fatigue: One of the big challenges for Zuckerberg & Co. is keeping teenagers enthusiastic about the site. Some surveys have shown a drop off in interest. SV Angel's Brian Pokorny, who recently spoke at the Disrupt New York 2013 conference hosted by TechCrunch, described Facebook in unflattering terms. “It’s a utility,” Pokorny said. “It’s not going anywhere.” Facebook's top executives are aware of the problem, but discount the idea that the social network site has lost its edge. Tomio Geron at Forbes, who live-blogged the Facebook earnings call, zeroed in on this quote from Facebook CFO David Ebersman:
We have high penetration rates in the U.S. and globally. Younger users remain among the most active users we have. Younger users are also extremely active users of Instagram. The urban legend we think is more often than not from surveys. We take this feedback seriously but the assumption is of a zero sum game. We don’t think so.The full earnings conference call transcript is now up on Seeking Alpha. The following Covestor portfolios are long Facebook as of 5/1/13:
- Undervalued Opportunities managed by Eric Steiman
- Flexible Long-Short managed by Ruben Kuswanto
- Long Only Sector Rotation managed by Banu Simmons
- Opportunistic Arbitrage managed by Stone Fox Capital
The post Five takeaways from Facebook’s Q1 earnings results appeared first on Smarter Investing
Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.