Facebook matches expectations, but stock still tanks after hours

The mystery is over: We now know whether or not Facebook is actually making money. In its first-ever earnings report released today, the social networking giant reported a net profit of $0.12 earnings per share on quarterly revenues of $1.18 billion. The earnings report matched Wall Street?s expectations of $0.12 earnings per share and revenues of $1.15 billion. Advertising revenue accounted for $992 million of the company?s total revenues. Facebook?s share price dropped by more than 11% in after-hours trading immediately following the news, dipping below $24.

A major reason for the drop was that Facebook only made money on the quarter after excluding the negative impact of pre-2011 restricted stock unit compensation. Without that adjustment the company would have posted a net loss of $157 million or $0.08 per share. Facebook may also have spooked investors with its large increases in capital expenditures, as the company spent?$413 million on CAPEX on the quarter, a year-over-year increase of 213%. What?s more, the company reported a GAAP operating loss of $743 million versus a GAAP operating income of?$407 million in Q2 2011, which could make investors concerned about the long-term sustainability of Facebook?s current trajectory.

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Source: http://news.yahoo.com/facebook-matches-expectations-stock-still-tanks-hours-201006110.html

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