Sunday, June 16, 2024

Facebook Shares Rise After Better-Than-Expected Revenue

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On Tuesday, Facebook reported its first good financial news in a long time. The company’s third quarter revenue grew 32 percent to hit $1.26 billion, beating analyst expectations of 29 percent revenue growth.

The Wall Street Journal’s Matt Jarzemsky reported, “Facebook Inc.’s shares surged on Wednesday toward their biggest daily gain since the company’s initial public offering in May, one day after the social network reported strong revenue and progress on making money from mobile ads. The stock climbed 20% to $23.31 in late-morning trading, after touching $24.25, its highest intraday level since July 27. Through Tuesday’s close, the shares had fallen 47% from their IPO price of $38.”

Reuters noted, “Facebook, which reported third-quarter results on Tuesday, said it now gets 14 percent of its advertising revenue from mobile ads, a far bigger increase than mostly skeptical analysts had expected. Mobile advertising has been a key investor concern hanging over Facebook, shaving more than $50 billion off its market value since its IPO.”

In The New York Times, Somini Sengupta wrote, “Facebook’s chief executive, Mark Zuckerberg, told Wall Street on Tuesday that his company was on its way to cracking the mobile puzzle. ‘I want to dispel this myth that Facebook can’t make money on mobile,’ he told financial analysts on the company’s third-quarter earnings call. ‘We are just getting started.'”

“Facebook is not out of the woods, but solid third-quarter revenue growth and surprisingly positive progress in the mobile space caused the company’s shares to soar nearly 13% in after-hours trading,” said Sam Gustin in Time. “That big ‘whooshing’ sound? It’s Facebook executives and shareholders exhaling. After a very rocky first half of the year, Facebook appears to be getting its groove back.”

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