Bullish Bets On The Rise Ahead of Facebook Inc (NASDAQ:FB) Earnings Call


Dallas, Texas 07/27/2015 (Financialstrend) – Facebook Inc (NASDAQ:FB) has enjoyed an impressive run since the start of the year as the stock is already up by 40%. The giant social network has continued to perform better than expected in its core operations seen by the growing optimism among investors about its long-term prospects. The company is to report its earnings when the market closes on Wednesday with the Street anticipating a 36% increase in revenue, which could come in at $3.97 billion.

 Wall Street Expectations

 The Street expects earnings per share of 47 cents a share which should be a 12% increase from last year’s same period levels.  Advertising is Facebook Inc (NASDAQ:FB)’s core business, and the Street will wait to hear whether the company was successful in attracting a large advertiser in the last quarter.  This is especially important as the company continues to battle the likes of Twitter Inc (NYSE:TWTR) and Google Inc (NASDAQ:GOOGL) for online sales.

Facebook Inc (NASDAQ:FB)’s research and development expenses more than doubled in the first quarter to $1 billion with marketing and sales expenses rising to $620 million. Increased spending according to analysts is not of concern at the moment as it is expected to generate long-term value in terms of realizing new opportunities for growth. Earnings and sales figures should attract a sizable amount of attention, but user growth engagement, and monetization aspects of the business will also be closely watched.

Video Offerings Prospects

The Street will also wait to hear what plans Facebook Inc (NASDAQ:FB) has for Video offerings, seen as an avenue that can offer more opportunities for growth, especially on the advertising front. The company’s marketing partner Bidalgo has already alluded to plans intended to triple sales, thanks to a new technology that can be used to automate the process of making personalized videos.

Facebook is becoming a leader on the video front as more users on the network prefer to watch video ads instead of the traditional static images. Automated videos are expected to give Facebook Inc (NASDAQ:FB) an advantage over YouTube as the race to attract more ads spend heats up.