Best of the Week
Most Popular
1.UK General Election Exit Polls Forecast Accuracy - Nadeem_Walayat
2.What's Next for the Gold Price? - Axel_Merk
3.UK House Prices Correctly Forecast / Predicted Conservative Election Win 2015 - Nadeem_Walayat
4.15 Hours to Save England from SNP Scottish Nationalist Dictatorship - Election 2015 - Nadeem_Walayat
5.Exit Poll Forecasts Conservative UK Election 2015 Win - Nadeem_Walayat
6.Gold And Silver China’s Pivotal Role: More Questions Than Answers. Not So For Charts - Michael_Noonan
7.Conservative Win 2015 UK General Election, BBC Forecast of 329 Seats - Nadeem_Walayat
8.Investing and the Lollapalooza Effect - Niels C. Jensen
9.Gold Price Target - Rambus_Chartology
10.Gold Price Nearing An Important Pivot Point - GoldSilverWorlds
Last 5 days
Are We in Another Credit Bubble? And Is It Different than Before? - 23rd May 15
The “Real Flash Crash” Will Scare You to Death - 23rd May 15
Venezuela: No Rule of Law, Bad Money - 23rd May 15
Robots That Can Beat the Market by 100% - 23rd May 15
Why Shake Shack Stock Is a Bad Investment - 23rd May 15
Gold Price Primary Driver Bullish - 23rd May 15
Time To Get Real About China - 22nd May 15
Gold Lifeboat to Global Economies “Titanic Problem” Warn HSBC - 22nd May 15
One Investment Could Save Two Generations' Retirements - 22nd May 15
Investing is About Identifying Gifted and Talented Camps - 22nd May 15
One of Europe's Latest Debt Nightmares - 22nd May 15
UK Immigration Crisis Could Prompt BREXIT, Propelling Britain Out of EU Despite German Factor - 22nd May 15
America Superpower 2016 - 21st May 15
Stock Market Secular Versus Cyclical Investing - 21st May 15
Banking Stocks Break Out with Higher Bond Yields - 21st May 15
The Tech Portfolio Built to Beat the Market - 21st May 15
Gold “Less Sexy” Than Bitcoin … For Now - GoldCore on CNBC - 21st May 15
The Russia-West Rivalry in the Balkans - 21st May 15
The US Dollar and the Precious Metals Complex - 21st May 15
Gold GLD ETF Drawdown Continues Unabated - 21st May 15
Who’s Killing the Stock Market? - 21st May 15
Your Best Way to Profit from the Narrowest Market in 20 Years - 21st May 15
Government Regulation and Economic Stagnation - 20th May 15
It’s Time to Hold More Cash and Buy Gold - 20th May 15
Choppy Asian Stock Markets - 20th May 15
Countdown to Global Financial Collapse - 20th May 15
Will Interest Rates Ever Rise? - 20th May 15
How to Cash in on Amazon Stock’s Amazing Cloud Success - 20th May 15
Three Hidden Forces Pushing Crude Oil Price Back Up - 20th May 15
U.S. Housing Market Strong Numbers in Perspective - 20th May 15
Greece Debt Crisis - Obama Has A Big Fat Greek Finger - 20th May 15
Now Is the Time to Own the Oil & Gas Leaders - 20th May 15
UK Deflation Warning - Bank of England Economic Propaganda to Print and Inflate Debt - 20th May 15
Trading Gold and Silver along with the Pros - 19th May 15
Gold Ticks Higher as London Housing Market Crash Looms? - 19th May 15
Global Stock Market, Commodities Group Analysis - 19th May 15
How Stock Investors Could Profit from the Dark Net Pattern That Few Others See - 19th May 15
The Patriot Act is now USA Freedom Act - 19th May 15
Investing in Europe? 5 Critical Insights to Boost Your Portfolio Now - 19th May 15
Gold Price Trend Forecast - 19th May 15
Stock Market Continues Defying Gravity, Dow New All Time High - 19th May 15
Are Gold and Interest Rates About To Take Off Higher? - 18th May 15
Nikkei Japanese Stock Index Set To Get Smashed - 18th May 15
Silver Price Projections For 2020 - 18th May 15
The IMF Leaks Greece, Institutions Forcing a Debt Default - 18th May 15
Europe's Stocks Bull Market Continues After Correction - 18th May 15
European Banks Vulnerable Today As 2008 Financial Crisis - 18th May 15
Payments, Currencies, and Broken Money - 18th May 15
Learning to Trade Markets - Dealing with Losing Trades - 18th May 15
Stock Market Sell in May and Go Away - Last Hurrah - Take2 - 18th May 15
The No. 1 Reason Stocks Will Climb Higher - 17th May 15
Gold, Silver Distorted Markets, Financial Sophistry, and Moral Hazard - 17th May 15
Stock Market CAC40 Trend Forecast - 17th May 15
Stock Market Diagonal Pattern Nearly Complete - 16th May 15
Gold And Silver - Elite's Game Of Jenga In Place. Your Move - 16th May 15
You’ll Never See a Better Moment to Invest in China - 16th May 15
Are Gold and Silver Stocks Breaking Out? - 16th May 15
War On Cash - Why the IRS Seized All the Money from a Country Store - 16th May 15
Is China Economy a Fire-Breathing Dragon or a Dragon on Fire? - 16th May 15
Silver Buying Only Starting - 16th May 15
Why Opinion Pollsters Got UK Election 2015 Badly Wrong - 15th May 15
Double Black Diamond - What a Bond Bear Market Looks Like - 15th May 15
This “Bubble” Is Set to Kick Off New Energy Profits - 15th May 15
German Gold Demand "Spikes"- Investment Demand Surges 63% - 15th May 15
How GDP Metrics Distort Our View of the Economy - 15th May 15
McDonald's Future Is Hard to Digest (NYSE: MCD) - 15th May 15
Dry Bulk Shipping Index Chart Analysis Update 2015 - 15th May 15
Economic Expansion Ahead? World Stock Markets Analysis - 15th May 15
Why Not Tell Greece How To Run A Democracy? - 15th May 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Biggest Debt Bomb in History

Facebook Stock Earnings Downgrades Keep Pouring In

Companies / Tech Stocks Jan 31, 2013 - 07:52 PM GMT

By: Money_Morning

Companies

Diane Alter writes: They say third time's the charm, but no such luck for Facebook stock, which fell even though the company's third earnings report since going public beat expectations.

The numbers failed to charm Facebook Inc. (Nasdaq: FB) investors who expected the report would offer more to like, and analysis who found plenty of concern in the expenses.


The social networking giant posted earnings per share of 17 cents, better than the consensus of 15 cents. Revenue came in at $1.59 billion, up 40% year over year, and ahead of forecasts for $1.53 billion. However, fourth quarter profit slumped 79%, dragged down by higher costs.

The Menlo Park, CA-based company's advertising business grew at its quickest pace since before the company's initial public offering (IPO) on May 18, 2012, and contributed to the robust revenue growth.

Revenue growth has been a major concern among investors since the initial public offering, leaving them to question if the company can make money off its massive 1 billion members.

Immediately following the Q4 earnings release after the close Wednesday, shares slumped more than 9%. Shares ended the volatile after-hours session down some 4% at $29.98. The sell off continued Thursday with FB shares down 3.52 % in early morning trading.

Shares had gained some 60% since November, but it looks like the Facebook stock rally for now may be over.

A Deluge of Facebook Stock Downgrades
A number of analysts grew cautious after the company announced it will increase spending this year on a cache of new initiatives, with heavy focus on improving mobile experiences for Facebook users. Concerns are that a heavy spending spree on research and development will cut into profit margins.

■Jefferies Group Inc. ( NYSE: JEF) analysts Brian Pitz and Brian Fitzgerald trimmed their rating on Facebook to a "Hold" from a "Buy," and in a research note wrote, "We are downgrading...as management warns of significantly higher expense levels in 2013 as a result of aggressive hiring and investment plans. While we are broadly supportive of Facebook's longer-term strategy, the material increase in 2013 spending pressures valuation, making the stock less attractive to own on a near term basis, in our opinion." The duo reduced their price target on shares to $30 from $32.
■Citigroup Inc.'s (NYSE: C) Neil Doshi slashed his rating on FB from a "Buy" to a "Neutral." The analyst wrote, "We view FB as a core long-term "net stock.' But with plans to invest heavily in the biz in 2013, and little expected contribution from new initiatives like Gifts or Graph Search, we don't see any near term catalysts for the stock. And Mobile Ads appear to be cannibalizing Desktop, which further concerns us."
■BMO Capital (NYSE: BMO) analyst Daniel Salmon lowered his rating to "Market Perform" from "Outperform." His target is $32.
■Stifel Nicolaus (NYSE: SF) analyst Jordan Rohan cut his rating from a "Buy" to a "Hold" citing concerns about compression from recent investments and potentially reduced growth prospects from some initiatives, like Gifts.
■Cowen Group Inc.'s (Nasdaq: COWN) John Blackledge maintained his "Neutral" rating, but lowered estimates "to reflect lower expected desktop and mobile advertising revenue and higher expected costs largely in 2013."

The Biggest Concern of those Investing in Facebook
In attempts to reclaim its position as a $100 billion company, Facebook has been moving quickly on its mission of morphing into a truly mobile business, a transition that began in earnest mid-2012. The social network behemoth kicked-up its online advertising services over the past several months, with a greater emphasis on mobile ads.

Mobile business accounted for 23% of total ad revenue in the fourth quarter, up from 14% in the third.

Mobile monthly active users totaled 680 million, a 57% increase over last year. The surge in mobile users highlights Facebook's urgency to monetize its growing member count in this explosive arena.

Facebook's app is the most popular in the United States, accounting for an impressive 23% of all U.S. app use. The social network also held the top spot in the U.S. in mobile display advertising revenue in 2012, with 18.4% of the market, eMarketer reports.

But that popularity and No. 1 position comes with a price and a predicament.

Mobile advertising doesn't generate as much money as ads that pop-up on PCs and laptops. In addition, garnering user attention on a much smaller screen is difficult.

In a world that is always plugged-in, online and on call, Facebook's challenges of keeping users engaged without turning them off with a deluge of ads is a daunting task, one that will be a concern of those investing in Facebook this year.

Source :http://moneymorning.com/2013/01/31/facebook-stock-downgrades-keep-pouring-in/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History