Facebook Q4 2013 Earning Preview: Big Jump Due to Video Ads in News Feed
We have just got a preview of Facebook earning report for fourth quarter of 2013. Facebook Inc. (NASDAQ:FB) is expected to report more than a 40% jump in profit because advertiser gather to upgraded advertising platform of Facebook during the busy holiday shopping season. The Melo Park, Clif.,company has disclosed earning results Wednesday just after makets close. This social media site is expected to report net income of $706.06 million or 20 cents per share. When you compared this income report of Q4 2013 with Q4 2012 then you realized there is a 40 percent jump in 2013 because FB earned, according to a Thomson Reuters Eikon poll of analysts. The company is expected to announce EPS/earnings per share of 27 cents as compared to 17 cents, almost 60 percent increase in 2013 as compare with 2012. Anticipation for revenue from October to December period would be $2.32 billion in comparison to $1.59 billion.
It is believed by analysts that Facebook will report 84 percent of earning per share/EPS on $7.63 billion revenue in 2013 in comparison with 53 cents EPS on $5.09 billion revenue in 2012. It is almost 58% jump in EPS and a 50% in revenue.
Actually, Facebook made a big change into its ads surge during last quarter of 2013. The company added auto-play video ads in its mobile ads and also made some improvements in algorithms only to provide the users the most accurate results they want. These changes deliver most relevant ads to users who get attracted toward many advertisers and thus, Facebook saw a big profit jump during Christmas shopping season.
“Facebook’s momentum with advertisers has built through the fourth quarter in terms of click-thru rates (CTR) and engagement with ad products (both mobile and desktop), which have exceeded advertisers’ internal goals,” iStockAnalyst wrote. “Facebook remains under-monetized relative to peers given the time spent on the platform and that Facebook ads exhibit strong pricing power, which can provide a tailwind to revenues going forward.”
Digital marketing agency’s social advertiser, Moly McCarty, said that new advertising features and some improvements to News Feed were the vital improvements for ads interface.She reported that her clients enjoyed great profit as overall spending on Facebook ads was enhanced to a great extent. She said that clients were ready to spent more budget after seeing high performance of their campaigns.
The big profit jump in quarter 2013 due to Facebook’s improved advertising features may have balance its falling fame among the youngsters. There are many reports that make clear that teens are leaving Facebook. The company also mentioned a loss of teenager in earning report of third quarter in 2013.
Earning report of quarter 4 would usually highlight new products for users, developers and advertisers. Facebook is also aggressively promiting its messaging application for keeping users way from the other messaging applications such as Snapchat.Investor will surely like to see what Facebook is planning for integrating video ads features in News Feeds and other services.