Facebook Beats Expectations, but Stock Falls
Fourth-quarter earnings surpass analysts' estimates
By Newser Editors and Wire Services
Posted Jan 30, 2013 3:40 PM CST
Facebook CEO Mark Zuckerberg speaks at Facebook headquarters in Menlo Park, Calif., on Jan. 15.   (AP Photo/Jeff Chiu)

(Newser) – Facebook's fourth-quarter financial results surpassed Wall Street's expectations, but the company's stock is dipping lower in extended trading. Facebook earned $64 million, or 3 cents per share, in the October-December period. That's down from $360 million, or 14 cents per share, a year earlier when it was still a privately held company. Revenue rose 40% to $1.59 billion from $1.13 billion.

Excluding special items, mainly related to stock compensation expenses, Facebook earned 17 cents per share in the latest quarter. Analysts polled by FactSet expected lower adjusted earnings of 15 cents per share on revenue of $1.51 billion. Facebook says it generated 23% of advertising revenue from mobile, up from 14% in the third quarter. The company's stock was down 4.3% to $29.91 in after-hours trading.

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Jan 31, 2013 7:44 AM CST
Shares dropping in the wake of a good earnings announcement is not uncommon. What happens is that investors were holding on, waiting for the earnings report. When it finally comes out, the suspense bubble pops like a balloon, and many investors automatically sell out and go look for another game to play. If more money decides to leave than stay, the price will drop. Sometimes,too, investors reconsider the news, like in this case... earnings exceeded expectations, sure... but compared to same time last year, when they made 14 cents a share, this year they only made 3 cents a share, less than a fourth of last year's results. That's enough to make people all head to the exits at once.
Jan 31, 2013 2:44 AM CST
Someone explain, why are their shares dropping if they're making good profit?