Facebook’s Q1: A Split Decision

Mobile metrics and revenues look good, but earnings miss

   

Investors were left guessing Wednesday night following Facebook’s (NASDAQ:FB) first-quarter earnings report.

FB registered a slight beat on revenues, posting $1.46 billion vs. expectations of $1.44 billion. However, the bottom line was light, with adjusted profits of 12 cents per share coming in a penny shy. The reaction? Fractional moves up and down, at least in the early hours of postmarket trading.

Facebook has been investing heavily in its mobile efforts, such as with ad platforms and new apps. On this front, the company is starting to see some amount of payback — on a quarter-over-quarter basis, the mobile ad business grew from 23% of revenues to 30% (for a total of $375 million).

Another positive: FB continues to attract scores of users. Monthly active mobile users spiked 54% year-over-year to 751 million — more than triple the figure tallied in Q1 2011. Also of note: Facebook currently has about 189 million mobile-only monthly users.

On the conference call, Mark Zuckerberg provided a couple other interesting tidbits. One that stuck out was that Instagram now has 100 million monthly users and is growing at a faster rate than Facebook did at this level.

Facebook also is becoming a core part of the overall mobile experience. Keep in mind that 81 of the 100 highest-grossing Apple (NASDAQ:AAPL) iPhone apps are integrated into the platform, and half of them are using Facebook ads.

Not all is well on the mobile front, however. Its recent Home app — essentially a homepage for Google (NASDAQ:GOOG) Android devices — is getting pounded early on in the form of poor ratings and comments on the Google Play app store.

Naturally, Zuckeberg says it’s too early to determine Facebook Home’s success or failure.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities, and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/facebooks-q1-a-split-decision/.

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