Facebook Inc.is set to report third-quarter earnings after the market close on Wednesday. By 2013, the numbers had dropped to 10% and 47% respectively. With this in mind, it’s really no wonder Twitter stock is down more than 30% in the a year ago while Facebook is surging to fresh historical highs.
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While it is possible that the dollar will stabilize heading into the end of the year (especially if the Fed decides to maintain a dovish bent), Facebook’s third quarter report should still suffer from the recent strength in the USA dollar. Last quarter, the Estimize consensus was only a penny shy of Facebook’s actual earnings, while the FactSet estimate was off by three cents.
Revenue: Sell-side analysts expect Facebook to report revenue of $4.37 billion, according to FactSet, up from $3.2 billion in the same period previous year. Contributors on Estimize are forecasting revenue of $4.40 billion. “In the last quarter, Facebook reached 95% of the online population, and it is the only service with a 100% reach among users of other top social media properties”. These more subjective factors are extremely important because ultimately Facebook’s future relies on revenue from advertisements, and advertising revenue will live or die based on the number of active users and the degree to which these users are engaged with the Facebook platform. Facebook shares ticked slightly lower, trading around $103.18 in afternoon trade on Tuesday.
Mobile advertising revenue represented 76% of total advertising revenue last quarter, a considerable increase versus 62% of sales coming from mobile in the second quarter of 2014. In particular, the article cited a survey performed by GlobalWebIndex asking internet users about frequencies of updating their Facebook status or sharing photos on Facebook’s platform.
It’s good to see Facebook daily users increasing at a faster rate than monthly ones, since this signals strong engagement trends. Instagram, which Facebook owns, has 400 million.
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Facebook recently launched a global marketing campaign to get more small-business owners in emerging markets interested in its advertising products. Last week, the company introduced a slideshow feature, which enables brands to create less-expensive, video-like advertising content.
