Fundamentālā analīze

Can Facebook Continue its Record Growth?

 
Two years after Mark Zuckerberg took Facebook Inc public, people aren’t laughing anymore. Facebook shares surged to a record high today rising as much as 6.7 percent to $76.03 at the open in New York and topping the previous intraday high of $72.59 set in March.
The social media giant has seen exponential growth since it was first launched in 2006, and its stock has risen 87 percent since the firm's listing on Wall Street in May 2012 for $38 per share. According to Zuckerberg what is fueling the rise is the power of mobile advertisements in generating revenue and profit.

2nd Quarter Sales

Facebook yesterday posted second-quarter sales that surged 61 percent to $2.91 billion, exceeding analysts’ average estimate of $2.81 billion. Mobile promotions accounted for 62 percent of ad sales, up from 59 percent in the prior period. Net income more than doubled to $791 million.
The gains underscore how far Zuckerberg has brought the social network since its 2012 initial public offering, when its stock plunged on investor concern over the lack of mobile revenue. Now that the chief executive officer has made ads on smartphones and tablets Facebook’s core business, he’s building on that foundation with a mobile network to spread the company’s ads across the Web and wireless devices, as well as with video promotions and by boosting the effectiveness of ads.
The bumper earnings seemed to put to rest any lingering doubts about Facebook losing popularity with its primary user base – teenagers – and concerns over how its 1.32 billion monthly users would adapt to targeted advertising. Facebook added another 40 million users in the second quarter, with one-fifth of the world's population now logging into the social network at least once a month.
The company has also made a string of acquisitions in recent times, including mobile messaging app WhatsApp in February and more recently - Pryte - a small Finnish firm which helps users in underdeveloped parts of the world gain temporary wireless access to apps such as Foursquare and Facebook.

Higher Ad Prices

Facebook’s performance last quarter was spurred by brands and marketers paying higher prices for better-quality promotions, said Chief Financial Officer David Wehner, who took over June 1 from predecessor David Ebersman. Wehner said the average ad price more than doubled from a year ago, even as ad impressions declined 25 percent over the same period.
Average revenue per user totaled $6.40 in the US and Canada, $2.80 in Europe, $1.08 in Asia and $0.86 in the rest of the world.
One concern many analysts have flagged in regards to Facebook is the firm's potential to generate revenue in other major markets outside of its primary markets in the U.S., Canada and Europe. The firm still faces regulatory hurdles in countries like China, the world's most populated country, for example, and also in Iran and Syria.
To capitalize on these trends, Facebook has been building its arsenal of advertising services. Apart from rolling out a video-ad product to compete for television budgets and a network for distributing ads on other developers’ apps, Facebook this month agreed to acquire LiveRail, a startup that would help serve video promotions on the Web beyond the social network. In April it launched a mobile advertising network which means adverts appear in apps that Facebook doesn't own.
Zuckerberg has also been making multibillion-dollar acquisitions to diversify the company. Facebook in February said it would pay about $19 billion for messaging app WhatsApp Inc. This week, the company completed the purchase of Oculus VR Inc., which makes a virtual-reality headset that Zuckerberg has said will be a major communication device after mobile phones. Facebook said it now has 1.32 billion monthly active users, up from 1.28 billion in the prior quarter, with 654 million using the product daily on mobile phones. Revenue per user was $2.24, up from $2 in the prior quarter and $1.60 a year earlier.
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