Facebook’s first earnings report exactly as expected, stock price falls anyway

Well there’s one for the books. The analysts were pretty much dead on the money when it came to Facebook’s first earnings call as a publicly listed company.

The social network pulled in US$1.18-billion with a profit of US$0.12 per share. Analysts were predicting US$1.15- billion, also at US$0.12 profit per share.

If you were looking for any spectacular revelations from CEO and founder Mark Zuckerberg, sorry no luck. The message from the hoodied one was more or less the same as it’s always been:

Our goal is to help every person stay connected and every product they use be a great social experience. That’s why we’re so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends.

One thing’s clear, GM’s decision (now reversed) to pull its Facebook advertising hasn’t scared off any other advertisers.

Advertising revenue for this quarter totaled US$992-million for this quarter, making up nearly 84% of the social giant’s income.

It also seems determined to prove that it’s a solid platform for advertisers. Facebook reports that now has independent ROI data “from more than 60 advertising campaigns” using a variety of third-party methodologies like panels and marketing mix models:

The results show that 70% of campaigns resulted in a return on ad spend of three times or better, and 49% of campaigns showed a return on ad spend of five times or better.

This attitude was only underscored by Zuckerberg’s assertion that “the best type of advertising is a message from a friend”.

Facebook is also revealed just how close it is to that magical one-billion monthly active user mark. There are now around 955-million users who log on to the social network at least once a month, more than half of whom are active on mobile (an increase of 67% from the same period last year).

fb q2 deck

As its mobile offering gets tighter, that number will only keep growing. Which is just one reason it seriously needs to figure out its mobile monetisation strategy.

According to COO Sheryl Sandberg, sponsored stories are “cornerstone” of this strategy. So we know that it does actually have one, and which product it intends using to drive it, but Facebook’s still pretty much leaving everyone in the dark about how it intends doing so effectively.

Interestingly the earnings report contains no mention of Zynga, which blamed its poor financial quarter on the changes Facebook’s been rolling out over the last few months.

The gaming company has always been one of Facebook’s biggest money spinners but relations between the two appear to have soured, especially as Zynga tries to stay ahead of the pack in an increasingly crowded market.

Zynga’s stock took a battering on the back of its poor quarter, falling nearly 40%. Kind of makes the 10% fall Facebook stock in after hours trading took seem tame by comparison doesn’t it?