FB Stock Jumps Ahead of Much Awaited Earnings from Facebook

FB stock

FB stock will be the center of attention on July 24, 2019, after market close, as Facebook, Inc. (NASDAQ:FB) is scheduled to report its second-quarter financial results. The earnings results come hot on the heels of the giant networking company reaching an agreement with the Federal Trade Commission on a $5 billion fine over its mishandling of people’s information.

Revenue Growth Concerns

Revenue growth is one of the key metrics to watch out for as Facebook reports its Q2 financial results. A deceleration in revenue growth has been the order of the day in recent quarters, so, many investors are waiting to see if the trend persisted in the second quarter.

Revenue in the first quarter of 2019 was up 26% compared to a 49% increase in the first quarter of 2018. Revenue growth in 2019’s first quarter was also slower, considering that it grew by 30% in the fourth quarter of 2018. The Company’s Chief Financial Official David Werner did warn in the first-quarter earnings call that revenue growth is likely to continue decelerating.

FB stock is trading higher by 1.30% at $201 in Monday’s morning session.

Daily Active Users

Another key metric to watch out for as the tech giant reports its second-quarter earnings results is the number of daily active users on Stories experience. Since its introduction in 2016, the stories format has found its way into WhatsApp, Messenger, and Instagram. As of the end of the first quarter, it boasts half a billion users, so it will also be interesting to see whether Facebook managed to attract new users in the second quarter.

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Ad sales remain the key driver of Facebook’s bottom line. First-quarter earnings results stood out in part because of the robust growth in ad impressions, after 32% year-over-year growth. Investors will no doubt be watching whether Facebook registered any ad growth from Instagram stories as well as the Instagram feed and Facebook newsfeed.

In addition to ad impression growth, the price per ad is another metric worth watching out for as it dictates the amount of money that Facebook walks away with on each ad sold. A 4% decrease in price per ad had a negative impact on ad impression growth in Q1 this year.

FB stock is one of the biggest gainers in the technology sector this year with a gain of 50%.

Featured image: DepositPhotos © grinvalds

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