NEW YORK — Facebook Inc. reported stronger-thanexpected revenue and a gain in user numbers Thursday in its first earnings report as a public company.
But investors weren’t impressed and after a brief spike, its stock fell more than 10 percent in after-hours trading. The decline means Facebook’s stock will most likely open today at its lowest level since going public.
It’s another big disappointment for the Harvard-born company that was supposed to usher in the next Internet boom.
“They didn’t break any banks,” said Debra Aho Williamson, an analyst at research firm eMarketer. “They did not come out any better than anybody had expected.”
Even so, Facebook Inc. said revenue grew 32 percent to $1.18 billion from $895 million a year ago.
Adjusted earnings of $295 million, or 12 cents per share, matched Wall Street’s expectations.
Analysts on average had expected slightly lower revenue of $1.16 billion, according to FactSet.
Facebook said it had 955 million active monthly users as of June 30, up 29 percent from a year earlier.
Overall the Menlo Park, Calif.-based company posted a loss of $157 million, or 8 cents per share, in the April-June period, mainly because of compensation expenses it incurred when it paid $1.3 billion in restricted stock and related taxes for employees as part of the initial public offering. The loss compared with earnings of $240 million, or 11 cents per share, in the second quarter a year ago.
The results came two months after Facebook’s stock flopped on its first trading day, May 18. The day began with glitches with the Nasdaq stock market that delayed trading by half an hour. Despite months of hoopla that had investors thinking it would soar, the stock closed just 23 cents above its $38 initial offering price. It has not reached that level since.
Though Facebook had a lot riding on its first public report, Wall Street’s outlook was muted.
Investors were likely holding out hope that Facebook would far exceed expectations — even though the company warned before its public offering that Wall Street’s expectations were too high. In a filing issued a week before its IPO, for instance, Facebook said its mobile users are growing at a faster pace than the number of ads on its mobile platform.
Analysts took that as a sign that their estimates were out of whack and many of them reduced their projected revenue and earnings estimates for Facebook.
In a conference call with analysts, Chief Executive Officer Mark Zuckerberg said Facebook’s mobile users are more active than those who use the personal computer version.
“On average mobile users are around 20 percent more likely to use Facebook on any given day,” he said. “So mobile not only gives us the potential to connect more people with our services and also gives us the ability to provide more value and more deeply engaging experience.”
Overall, Facebook said its revenue from advertising totaled $992 million, a 28 percent increase from the same quarter last year. That number accounted for 84 percent of total revenue. The company did not say what portion was from mobile advertising.
Facebook’s stock closed Thursday at $26.84, down 8.5 percent, before the earnings report was released.
Business, Pages 29 on 07/27/2012