In the wake of its embarrassing initial public offering and amid questions about its mobile strategy, social media giant Facebook must top revenue estimates of $1.1 billion as it reports to Wall Street today, according to experts.
But the real key to soothing investors will be the conference call featuring company executives -- including CEO Mark Zuckerberg -- talking about Facebook's ability to make money outside the English-speaking world; the company's acquisition of Instagram; and 2012 as a whole, said Max Wolff, senior analyst at Greencrest Capital.
"Clearly the expectations have been brought down with the valuation of the company, since it's become a case study of how not to go public," Wolff said. "Some of the bloom came off the rose."
Facebook releases its second-quarter results -- the company's first since going public -- after the stock market closes today.
Facebook shares closed at $29.34 yesterday, a nearly 23 percent drop from its IPO opening price of $38 on May 18.
Wolff said the company would buy "some breathing room" in having to answer questions about photo-sharing app Instagram, which Facebook bought at nearly twice its valuation, if it beats earnings estimates.
"Doing a large acquisition before or right after an IPO is a bit unusual, so investors are going to want to know, 'OK, you spent a lot of money, you did an unusual acquisition -- what have you made of it?' " Wolff said. "We'll give you the benefit of the doubt that you had to make it, now show us why."
Francis Gaskins, president at ipodesk top.com, said $1.1 billion in second-quarter revenue was "not something to write home about" as the company would be "lucky" to generate $4.8 billion for the year, a "far cry" from $6 billion estimates floated around in January.
"They have a history of missing their numbers. The question is, do they have credibility talking about growth going forward," Gaskins said. "With $1.1 billion going forward, it's a lot of 'Trust me -- we're working on it -- because we have a big user base.' "
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