Facebook First Quarter Earnings Clouded with Uncertainty

On Wednesday, social media giant Facebook Inc is scheduled to release its first-quarter earnings report for the first quarter. The company has been part of the headlines for the past month after the company revealed that it allowed Cambridge Analytica to harvest information from more around 87 million profiles, 70 million of which comes from the United States. This led to a negative reaction from investors and users as well. 

While this may contribute much effect on the earnings results of the company for the first quarter, shares of the company may still lose ground during the earnings call should the company fail to make announcements or updates of its plans to improve its relationship with its users as well as investors.

Previous Earnings Report

Facebook crushed its fourth quarter earnings report for the year 2017 that pushed its shares to trade higher despite seen dropping during the same trading session on the announcement of a rise in the prices of advertising. 

The company posted earnings of $2.21 per share beating most analyst estimates of $1.95 EPS. The revenue of the company was also at $12.97 billion exceeding expectations from analysts of $12.55 billion. This is compared to the company’s reported revenue of $8.81 billion during the same period a year ago.

The company posted daily active users of $1.4 billion in line with most expectations. These numbers are set to slightly decline during the first quarter. Monthly active users during the previous quarter were also in line with analyst estimates of 2.13 billion.

Facebook which has then already been struggling with one of its most challenging years after becoming public has extended its efforts into improving user experience including cutting down the number of viral videos as well as cracking down on online sellers or vendors who put up misleading advertisements during the holidays.

Earnings Expectations

The company is forecasted to post earnings of $1.36 per share but has been estimated to earn as much as $1.58 per share for the quarter on a revenue of $11.83 billion. Earnings forecasts have slipped by around 1% over the past two months. 

While some expect the data-mining scandal to take full effect on the company’s earnings during the second quarter earnings, Facebook’s first-quarter earnings report is still expected to be impacted by around 20% by the data usage issue. However, investors are focusing also on the company’s advertising sales as well as any possible changes on its advertisement inventory.

Read also: U.S. Lawmakers Show Concern on Facebook Data Leak

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