/// As Q2 Earnings Approaches, the Street Stays Bullish on Facebook’s Mobile Prospects

July 24, 2013  |  All Things Digital


Facebook’s S-1 filing in early 2012 came with a rude awakening we’re all quite familiar with by now; the world is going mobile, and Facebook’s ad business needed to adapt fast in order to keep up with it. Now, as Facebook prepares to report its second-quarter earnings this afternoon, something has shifted: Wall Street is actually optimistic at Facebook’s mobile monetization prospects. The Street’s consensus calls for earnings per share of 14 cents on revenues of $1.62 billion, an estimate up from the EPS of 12 cents on revenue of $1.18 billion reported during Q2 of last year. “While quarterly results at FB will likely remain volatile, we remain bullish on the direction and growth trajectory of the company,” Sterne Agee analyst Arvind Bhatia wrote in a research note this week. The biggest boon for some? The trending surge in Facebook’s mobile revenue figures seen in recent quarters. Mobile revenue accounted for nearly 30 percent of Facebook’s ad business in the first quarter of this year, which was already a jump up from 23 percent in the fourth quarter of 2012. That’s expected by some analysts to grow, albeit slightly, to a daily run rate of nearly $5 million on mobile ads alone. Facebook has made it clear that at least one of its more recent ad products — mobile app installation ads — has been quite successful in driving growth, and J.P. Morgan’s Doug Anmuth expects that to continue. “We remain bullish as we believe ad dollars are increasingly shifting to online, mobile, and social and we expect Facebook to capture a growing portion of ad budgets going forward,” Anmuth wrote in a research note. The big unknowns are the usuals that we’ll be looking for. Will the company break out any metrics beyond its usual stats on daily and monthly active users? That may be something to watch for, given Facebook’s increasing competition for mindshare from other mobile-based sites like Snapchat, WhatsApp and International competitors like Line and KakaoTalk. Perhaps Facebook will detail some engagement-based stats that could rebut the chatter that the social giant is losing its cool with younger audiences . Another wild card: The oft-speculated eventual appearance of auto-play video ads in the News Feed.

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As Q2 Earnings Approaches, the Street Stays Bullish on Facebook’s Mobile Prospects



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