{"id":60406,"date":"2014-10-29T07:33:05","date_gmt":"2014-10-29T07:33:05","guid":{"rendered":"http:\/\/4cd.e16.myftpupload.com\/?p=60406"},"modified":"2014-10-29T07:33:05","modified_gmt":"2014-10-29T07:33:05","slug":"facebook-warns-of-increased-spending-shares-fall","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/?p=60406","title":{"rendered":"Facebook warns of increased spending, shares fall"},"content":{"rendered":"

Facebook<\/span>\u00a0warned on Tuesday of a dramatic increase in spending in 2015 and projected a slowdown in revenue growth this quarter, slicing a tenth off its market value.<\/p>\n

The hefty spending plans exposed the first signs of stress in the rock-solid support that investors have accorded the social networking company over the past year.<\/p>\n

With Facebook’s mobile advertising<\/span> business delivering repeated quarters of breakneck revenue growth, the company has faced little pushback from investors on pricey, multi-billion dollar acquisitions such as WhatsApp and Oculus. Shares of Facebook\u00a0<\/span>reached an all-time high of $81.16 on Tuesday, before the company reported its third-quarter results.<\/p>\n

[contextly_sidebar id=”dykDuO9mCD1KGuFVGUyT4ZkBz5o0UAmb”]Chief Financial Officer Dave Wehner told analysts on a conference call that the social network is preparing for a 55 percent to 75 percent spike in expenses next year, when the world’s largest social network intends to invest in Whatsapp, Oculus and other products that have yet to show a profit.<\/p>\n

That’s a big change from the company’s current spending patterns, with costs and expenses in the first nine months of 2013 up a relatively modest 32 percent. Facebook declined to provide any estimates for its expected pace of revenue growth in 2015, adding to investor worries.<\/p>\n

“Giving expense guidance without giving revenue guidance is frustrating and spooking The Street,” said BTIG analyst Richard Greenfield.<\/p>\n

“The multi-billion dollar question is what\u2019s revenue growth going to look like next year,” he said.<\/p>\n

Wehner forecast revenue growth of 40 percent to 47 percent in the final quarter of 2014. That’s down sharply from 59 percent in the third quarter.<\/p>\n

The financial forecasts came on the same day as Facebook revealed hundreds of millions of dollars in losses from WhatsApp.<\/p>\n

Facebook Chief Executive Mark Zuckerberg has told Wall Street he is in no hurry to extract a payoff from the collection of acquired products, stressing the importance of growing the number of users first.<\/p>\n

“For us products don\u2019t get that interesting until they have about a billion people using them,” Zuckerberg said.<\/p>\n

Shares of Facebook, up roughly 47 percent this year, slid nearly 9 percent to $73.80 in extended trading on Tuesday.<\/p>\n

MOBILE SURGE<\/strong><\/p>\n

Facebook reported a better-than-expected 59 percent jump in third-quarter revenue and a solid gain in its user base that’s already the world’s largest social media community. The company is considered a pioneer in mobile advertising<\/span>, outshining rivals like Twitter Inc, which are struggling to sustain user engagement and growth.<\/p>\n

Google Inc, the world’s No.1 Internet search engine, has seen its advertising rates stuck in a multi-year decline as it adapts its lucrative advertising business for the smartphones that consumers increasingly favor.<\/p>\n

Mobile ads represented two-thirds of Facebook’s advertising revenue in the third quarter, and the company said that the average price of its ads more than tripled year-on-year.<\/p>\n

“They continue to show that there is a lot of demand for their product, both in terms of users wanting to spend time there and advertisers wanting to spend money,” said Ben Schachter an analyst with Macquarie Research.<\/p>\n

Facebook’s total number of monthly users reached 1.35 billion in the third quarter, with 64 percent of its users accessing the service every day.<\/p>\n

Facebook said revenue in the three months ended Sept. 30 totaled $3.2 billion, up 59 percent from $2.02 billion in the year-ago period. Analysts polled by Thomson Reuters I\/B\/E\/S were looking for revenue of $3.12 billion on average.<\/p>\n

Net income increased to $806 million, or 30 cents a share in the third quarter, compared to $425 million, or 17 cents a share in the year-ago period. Excluding certain items, Facebook said it earned 43 cents a share.<\/p>\n

Facebook also for the first time disclosed the financial performance for WhatsApp, a mobile messaging app that the company acquired earlier this month for $22 billion.<\/p>\n

According to a filing with the Securities and Exchange Commission on Tuesday, WhatsApp lost $232.5 million in the first six months of 2014, compared to a loss of $58.8 million in the first six months of 2013.<\/p>\n

–<\/p>\n

Source: Reuters<\/p>\n","protected":false},"excerpt":{"rendered":"

Facebook\u00a0warned on Tuesday of a dramatic increase in spending in 2015 and projected a slowdown in revenue growth this quarter, slicing a tenth off its market value. The hefty spending plans exposed the first signs of stress in the rock-solid support that investors have accorded the social networking company over the past year. With Facebook’s […]<\/p>\n","protected":false},"author":20,"featured_media":60407,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":[],"footnotes":""},"categories":[],"tags":[18],"class_list":["post-60406","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-dr-akwasi-osei"],"_links":{"self":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/60406","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=60406"}],"version-history":[{"count":0,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/60406\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/media\/60407"}],"wp:attachment":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60406"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60406"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60406"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}