Facebook shares are dropping due to losses.
July 27, 2012- Facebook was able to meet the expectations of Wall Street analysts in its very first quarterly report since becoming a public company. However, the stock price for the company dropped during after-hours trading by as much as 10%, as the growth in the company continues its slow down.
The company reported a loss of $157 million for the second quarter mainly because of the expenses related to paying employees who had stock options in its May IPO. Excluding that, the adjusted earnings for the company reached $295 million or 12 cents per share, which was in line with estimates from Wall Street analysts.
Investors have kept a close eye on revenue figures for the social networking business to see if still has more growth potential. Second quarter revenue increased 32% from last year to $1.18 billion, which beat the estimated $1.15 billion, but growth has slowed from only a couple of quarters ago when the company more than doubled its revenue. Growth of revenue in the first quarter compared to last year was 45%, but the periods prior to that were 55% and 104%.
Share prices dropped over 10% to $26.84 in after-hours trading. When the stock closed on Thursday, it was down 29% from the price of $38 offered at the original IPO in May. Advertising revenue was up by 28% for the quarter to over $992 million, which represented 84% of total revenue. Payments revenue was $192 million, said the company.
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