Facebook, Apple Exceed First Quarter Expectations
Six days of gains on Wall Street came to an end Wednesday with the S&P 500 index slipping 0.2 percent to 1,875, the Dow Jones industrial average losing 0.1 percent to close at 16,502, and the NASDAQ Composite closing at 4,127 – a decline of 0.8 percent. Facebook shares closed down more than 2 percent at $61.36, but after the closing bell were up $1.50, boosted by the release of the company’s quarterly results. Facebook’s success in the first quarter of 2014 is being attributed primarily to strong growth in the social media company’s mobile advertising business, with revenue climbing by 72 percent to $2.5 billion, exceeding analyst expectations of $2.36 billion.
Daily active users of Facebook continue to increase with the current average being 802 million, while monthly active user grew by 15 percent to 1.28 billion. Data reveals that traffic on mobile devices grew 43 percent year on year to 609 million, with monthly active mobile users reaching 1.01 billion. It is anticipated that this number will continue to grow as more and more people connect with mobile devices. Earlier this year, Facebook purchased messaging service WhatsApp, and on Wednesday received approval from the Federal Trade Commission for the purchase of Oculus VR, designer of a virtual-reality gaming headset. Other news from Facebook is that current CFO David Ebersman will be replaced by David Wehner in September.
Apple shares jumped to $566.50 (almost 8 percent) in after-hours trade, boosted by reported sales of 43.7 million iPhones in the first quarter of 2014 resulting in a 4.6 percent rise in revenue to $45.6 billion, beating analyst forecasts substantially. Apple also announced plans to increase its dividend and stock buyback program. It is anticipated that Apple’s unexpectedly strong results will appease investors who have been calling for new innovations from the company.
First quarter results continue to filter in, with up to 75 percent of the 139 stock market listed companies that have already reported results beating analyst estimates.