Facebook Inc. released its first earnings report since its May IPO, posting a net loss of $157 million, despite posting $1.18 billion in revenue, a 32 percent increase for the company. Executives for the newly public company explained the 8 cent per share loss as the result of stock compensation charges stemming from the IPO. With figures adjusted for those charges, Facebook earned 12 cents a share, on par with the expectations of Wall Street analysts.
Shares for the company continue to drop in value, falling below $24 for the first time following the report. Investors were left unimpressed by the company’s presentation, which focused on new avenues for growth, rather than plans to boost revenue. Mark Zuckerberg, Facebook’s 28-year-old CEO, made mention of newly introduced advertising services, and new developments for Facebook’s mobile operations, an increasingly large portion of their services.
“At this early stage of our growth, investment is a top priority as opposed to managing for a target margin,” said Facebook CFO David Ebersman. The company’s capital spending increased by over 300 percent, reaching $413 million during the quarter. Still, with stock value continuing to fall after the troubled IPO, investors are left with mixed impressions.
“The question is, do you get a re-acceleration in the business at some point?” Oppenheimer & Co analyst Jason Helfstein told Reuters. “Because they didn’t give you guidance, you’re going to have to wait to find out what happens.”
A year ago, still acting as a private company, Facebook posted a net income of $240 million, or 11 cents per share. Eight years of constant growth came to a head with the IPO, but the company is still working to get over the hump after initial trading stumbled. In June more than 40 lawsuits had been levied against the company related to technical issues during the IPO, and the stock’s price drop. The Nasdaq Stock Market has planned to hand out $40 million in cash and credit to reimburse investment firms who suffered through opening day technical issues.
Facebook’s stock currently sits at $23.09 per share, a far cry from its $38 per share opening price.
