Facebook Second Quarter Earnings Surpass Analysts’ Expectations but Growing Expenses Cause Concern
Facebook is still rocking! The company announced its second quarterly earnings results beating the analysts' estimates, not only with the profits but also the user growth. The only worry that lingers around is connected to the fast growing expenses.
Earlier in the year, Facebook had warned the investors about the rising expenses as the Menlo Park, California based company invests in long-term projects like virtual reality, building new data centers along with recruiting some top level engineers. S&P Capital IQ analyst Scott Kessler said, investors all across the technology are scrutinizing the growing expenses including Facebook and Google.
In the second quarter, the social network company's revenue increased 39 percent to $4.04 billion. Last year same period the revenue was noted as $2.91 billion.
However, the big gain was offset by the total expenses which grew 82 percent as compared to last year same quarter.
Net income dropped l 9.1percent to $719 million compared to last year's $791 million.
Facebook said, not including some expenses, the company earned 50 cents per share. Average expectation of the analysts was 47 cents for adjusted earnings. On Wednesday, the shares of Facebook were unstable during extended trading, oscillating between gains and losses.