It's not the IPO big day, which turned out to be a total FAIL! day. Rather, it's Facebook's first quarterly earnings report as a public company, due to arrive tomorrow.
Though there’s a lot riding on its second-quarter earnings report — Wall Street analysts aren’t expecting big surprises. Why? Facebook effectively warned investors before its IPO that Wall Street’s expectations were too high. In a filing issued a week before its IPO, Facebook said its mobile users are growing at a faster pace than the number of ads on its mobile platform.
As a result of that disclosure and others, many analysts reduced their estimates for Facebook’s projected revenue and earnings.
On average, analysts are expecting Facebook to post earnings of 12 cents per share on revenue of $1.16 billion, according to a poll by FactSet. In all of 2011, it had net income of $1 billion and revenue of $3.71 billion, according to regulatory filings.
So if Facebook hits its marks tomorrow, it will be on track to make something in the $4 billion ballpark for the year (more if you count the first quarter, during which Facebook was still a private company). At Seeking Alpha, Helix Investment Management has a good look-ahead post that says Facebook could have a $5-billion 2012 and asks the Very Large Question: Will CEO Mark Zuckerberg join CFO David Ebersman, whom many credit with screwing up the company's IPO, and COO Sheryl Sandberg, who is no longer the most famous female executive in Silicon Valley now that Marissa Mayer has become CEO of Yahoo, on the earnings call? More importantly, will he join the call while wearing a hoodie?
Facebook's earnings outlook is nothing spectacular. Contrast the expectation for tomorrow with what Caterpillar did today, announcing that it made $17 billion in the quarter, or $2.54 per share — a full $0.25 higher than Wall Street expected. But this is the new story for Facebook: it's just another public company now. Even it has a billion users and monumental growth ahead of it in mobile. It used to dance to its own tune. Tomorrow, for the first time, it will dance to Wall Street's.