Facebook Earnings Top Wall Street Expectations After the Bell

Mobile, video views powering Facebook profit and revenue.
5:25 | 01/28/15

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Transcript for Facebook Earnings Top Wall Street Expectations After the Bell
I'm Michelle Franzen in New York is the financial markets closed and after hours earnings hit the wires this is story stock. Facebook the company reporting quarterly earnings. After the bell tonight and shares little jumpy after hours at FaceBook beat expectations. On earnings and revenue. And saw big gains in mobile. And to give us more detail on Facebook's earnings report I'm joined by pro been. Men on research analysts at Bloomberg. So let's take a look at the numbers what did FaceBook do well this quarter. Sure I think god main thing is on the top line not revenue beat consensus today at 49% growth rate which is over but the street is expecting 46%. So yeah relatively good numbers which is indicative of strong performance during the holiday shopping season. And probably even a good contribution from their burgeoning online video business. But I think what investors are really be looking on the call is really. To do with expenses I mean FaceBook had estimated a fifty to 70% growth in 2015 expenses so be interesting to see if there's an update on that. These are the you know where they're gonna spend the money by others that core business or some of the new products such as what's out there opulence our rights so mobile was evidently a huge driver for FaceBook. Can they keep this going. And that's right I mean FaceBook is now in very mobile business remember that you know as soon after their IPO ever a lot of fears and discontent around others. This company can really unit startup in the old business given that a lot of the usage was there I think what the company has done really impressive means we be closed that gap between. Where the revenue comes from a mirror the youths ages so for instance you look at it this quarter now mobile it's 69% of revenue. And if you look at just their users in a mobile users are over 80% of that usage so. They've been slowly and steadily closing that gap and also monetize and some of these new axis which is in Easter Graham which is really. It very mobile product should really help them in that regard. All right we are hearing in that from Sheryl Sandberg saying that FaceBook is has some three billion. Hits a day what do you think video views what do you think about that. That's right I think I'll be really think video is going to be one of the two very key drivers for face the going to pretty fifteenth and sixteenth. As you know online video is one of the fastest growing businesses and Allman media. And really the key point remember here is that. Video rods for the commander Reid can afford five times higher than traditional display banner ads so you know for FaceBook to get a lot more of those odds. Being shown on video verses a you know standard text for batter rich media message is obviously a lot more lucrative opportunity for them. That was sort of the tipping point right Wall Street has been betting on CEO Mark Zuckerberg to keep this growth going what other areas and does he need to focus on. And what does he have anything up asleep. Well I mean the short term drivers for them like we discussed this earlier you know online video is a big growth driver especially given that you know Inkster Graham is really becoming a law more of a prominent business for them. And I think the second one really has to do with out measurement and targeting. You know you've heard Charles on would be very vocal about Facebook's ads being a lot more efficient and some of that out soon and you know the search engines like Google. So it'll be really interesting to see how FaceBook as a pioneer in just that industry as a whole. Really gets forward and showing that these odds on these online platforms really drive retail sales at the end of the day and I think that's going to be a very key driver for them. Are right so we've got the FaceBook earnings that the strong reports so why is FaceBook not treating higher. I think out you know one has to do with the down market and I think really the other thing that investors are looking for is really the expense outlook we've seen that. You revenues moderated from 70% 60% growth rate to 49% this quarter so you can see that revenues moderating and you know be haven't seen an outlook yet in the press release. And I think the other real factors expenses. Given that you know Facebook's movie going up front and spending a lot of money and some of these very very new businesses rather its virtual reality binoculars. Whether it's you know going into developing countries in building not in an it infrastructure to given that a lot of these costs are coming out upfront. We'll be interesting to see you know how much of a hit they willing to take in profits really kept these businesses to go. And so what does that mean when it comes to competition. And FaceBook peers like Twitter. I think what FaceBook is doing is very indicative of medicine and industry if you look at the industry it's very fast moving. Unit trends come and go every to a three year so really that cycle is much much faster. So what Facebook's we'll be doing is trying to support user group mean you look at an acquisition such as what's out you know which is a turning to bush and our acquisition. But what what type of the allows you to do is get a lot of users in these developing regions. So for instance you know just in the last year you've seen what's that grew from 400 million to 700 million users and yes soon enough to fit its ability user's FaceBook will really be. You know one of the companies which has two billion plus users. User products within and so I think. That's a very valuable thing to have over the long. All right for being met on from Bloomberg thank you very much for joining us. Thank you and you've been watching stories stocks did abcnews.com. For your latest headlines I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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