Markets Unfriendly to Facebook Results

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In Facebook's first earnings report since its IPO, the social media company reported higher total revenues and higher advertising revenues than expected. But non-GAAP earnings per share only met the $0.12 mark that analysts had forecast and Facebook shares slumped in after-market trading as traders worried about a slowdown in the company's growth curve.
By 6 p.m. (ET), Facebook stock had fallen 10.6% in after hours trading and was down 8.5% for the day to around $24 per share, well below its $38 IPO price.
On the second-quarter earnings call founder and CEO Mark Zuckerberg addressed those concerns by stressing that the company was working to increase its revenue opportunities. He pointed directly to new products in mobile and its work to make Facebook ads more social as examples of how the company planned to continue to grow.
Overall revenue climbed 32% to $1.18 billion from the year-earlier period with a 28% bounce in advertising to $992 million. Non-GAAP net income, which excluded share-based compensation, came in at $295 million, the same as a year earlier, or about $0.12 a share. But Facebook took a $157 million loss for the quarter, mainly due to the costs of share-based compensation, a major shift from the $240 million profit in the second quarter of 2011.
The company also reported increased usage, with monthly active users (MAUs) hitting 955 million as of June 30, an increase of 29% in the last year and daily active users (DAUs) were 552 million on average last month, an increase of 32%.
Mobile MAUs totaled 543 million as of June 30,  a 67% year-over-year jump from 325 million in the second quarter of 2011. The mobile numbers are particularly important because users are increasingly shifting their time to mobile devices.
In the run-up to the results, the market had been jittery. Facebook's stock had not traded above $28 since its IPO and it fell during early trading on Thursday July 26, after Zynga reported disappointing results, with lower-than-expected revenues and earnings per share, which it blamed on a declining interest in Facebook games. Zynga also slashed its 2012 financial targets.
Zynga shares have lost nearly 70% of their IPO price from December. Zynga's prospects are important because Facebook gets over 10% of its revenue from the company. 

Read more at B&C here.