Facebook is preparing to release its first quarterly earnings report as a public company today, in what amounts to the giant social network’s first financial test since its controversial stock market debut this spring.
While experts caution against reading too much into one quarter’s results, it’s clear that many across the tech industry will be scrutinizing the company’s performance for indications about its business model – and for a guide to Facebook’s future.
“This will set the stage for what they’re going to do,” said Brian Blau, an Internet industry analyst for the Gartner research group.
Facebook’s stock still hasn’t recovered from the steep plunge it took after its May 18 initial public offering. While its debut stock price of $38 gave the company a market value of $104 billion, its shares closed Wednesday below $30.
A strong earnings report could restore some luster, analysts said, while a weak report could be devastating for investors.
“Given the rough start they had” with the IPO, Blau added, “I think not only investors but advertising partners, app developers and a variety of people that use the social network want to understand what it says for the health and well-being of Facebook.”
Facebook has scheduled a conference call this afternoon to discuss its spring-quarter results with investment analysts. Along with basic metrics such as revenue and earnings, analysts are hoping executives will address key issues including Facebook’s growth rate and plans for building its advertising business, particularly in the area of mobile computing, to compete with bigger rivals such as Yahoo and Google.
“Facebook still has a lot to prove to advertisers – particularly the big-brand advertisers, the ones that spend millions or even billions of dollars a year,” said Debra Aho Williamson, social media marketing analyst at the eMarketer research firm.
The company hasn’t said whether CEO and co-founder Mark Zuckerberg will speak during the call.