What to expect from Facebook Q3 earnings Here is a preview

Facebook CEO Mark Zuckerberg delivers a speech during a workshop for application developers in Jakarta, Indonesia, Monday, Oct. 13, 2014.

It has been a tough earnings season for tech companies so far, with Twitter, Netflix and Amazon all getting hammered after reporting their quarterly results this month. Will Facebook fare any better?

Facebook will report its third quarter results after the market closes on Tuesday. It is expected to post earnings of $0.40 per share on revenue of $3.12 billion, according to analysts surveyed by Thomson Reuters. By comparison, Facebook reported earnings of $0.25 per share on revenue of just more than $2 billion in the same quarter a year earlier.


The social media company has beat analyst estimates in each quarter this year, but as CNBC points out, Wall Street's expectations may be a bit high considering Facebook's own warning that the growth rate could slow in the second half of this year.

    After having struggled in its first months as a public company, Facebook has turned into a Wall Street darling

After having struggled in its first months as a public company, Facebook has turned into a Wall Street darling thanks to in large part to its ability to monetize on mobile. Mobile ads accounted for 62% of the company's total ad revenue in the second quarter, up from effectively nothing in the lead-up to its IPO in 2012. Arvind Bhatia, an analyst with Sterne Agee, predicts that mobile ads will account for 66% of ad revenue in the September quarter and may hit 80% in the next two years.

"There is seemingly little that can get in the way of Facebook given its hegemonic status in the world of online advertising, matched only by Google," Brian Wieser, an analyst with Pivotal Research Group, wrote in an investor note last week.

Investors and analysts are generally optimistic about Facebook's ability to monetize through video ads, Instagram ads and the recently launched "Buy" button on its website, though the company's execs will likely stress that these efforts are still very early on.

Some of Facebook's recent acquisitions may be in the spotlight during the earnings call that follows the release on Tuesday. Facebook finally closed the WhatsApp deal earlier this month, after having announced it back in February. It also launched a new ad platform in September based on Atlas, a company it acquired from Microsoft last year.

Facebook stock topped $80 a share for the first time last week and was trading near its all-time high Tuesday morning ahead of its earnings announcement. The company now has a market cap of just under $210 billion.

Source Mashable