Investors unhappy with Facebook’s first financial report as a public company fled the stock in droves. Since going public, Facebook has seen the value of its stock decline by 40%. David Ebersman, the chief financial officer, said, “Obviously we’re disappointed about how the stock is traded, But the important thing for us is to stay focused on the fact that we’re the same company now as we were before.”
Revenue for the company was up 32%, beating analysts’ predictions. Revenue for the quarter increased to $1.18 billion, from $895 million during the same period a year ago. Most of the increase in revenue came from advertising.
Profits were not impressive in the second quarter. The company reported a net loss of $157 million, or $0.08 a share, compared with net income of $240 million, or $0.11 a share for the same quarter last year. Excluding stock compensation, the company posted a profit of $0.12 a share, or $295 million, which met the expectations of Wall Street analysts.
Company chief executive Mark Zuckerberg extolled the growth prospects of the company to industry analysts. Company executives also emphasized their efforts to make Facebook accessible on mobile devices. Mr. Zuckerberg said, “The shift towards mobile is incredibly important.”
Company executives said the company recently started surfacing advertisements in the mobile newsfeed and they were being careful not to crowd the mobile platform with too many ads so they will not spoil the user experience. 543 million people looked at Facebook on their mobile devices in the second quarter, a 67% increase from last year. Facebook has nearly a billion users worldwide, but the total number of users has inched up slowly.
Jordan Rohan, an analyst at Stifel Nicolaus, said, “With the unprecedented hype around the company’s I.P.O., some investors believe more upside would have materialized — higher revenues, higher earnings.” Colin Sebastian, an analyst at Robert W. Baird & Company, said, “Before they were a public company, Facebook was judged by growth in users. Now that they are so well penetrated in most Western markets, growth has to translate into monetization.”