Facebook reports earnings as coronavirus crisis widens

Facebook (FB) on Wednesday reported quarterly advertising revenue that spiked 17% year over year and a jump active users, a reflection of the platform’s growing clout as the coronavirus crisis plunges the world into a deep recession.

Here are the key metrics expected by Wall Street, according to a Bloomberg consensus forecast:

• GAAP earnings per share: $1.71 vs $1.71 expected

• Revenue: $17.74 billion vs. $17.3 billion expected

• Ad revenue: $17.74 billion vs. $17.1 billion

• Daily active users: 1.73 billion vs. 1.68 billion

• Monthly active users: 2.68 billion vs. 2.34 billion expected

Like its search counterpart Google (GOOG), Facebook derives a significant chunk of its money from advertising, and as such is viewed as a proxy for the coming downturn in ad revenues as companies retrench.

Yet analysts at Bank of America, which maintains a “Buy” rating on the stock, wrote recently that the social platform was expected to keep showing strong utilization amid the pandemic, and that a range of new services would yield “material monetization opportunities ahead.”

Credit Suisse also rates the stock highly, as an “Outperform” given Facebook’s potential for surprisingly robust ad revenue as it introduces new products like Instagram Checkout and a search option for Marketplaces.

“Street models are too conservative and underestimate the long-term monetization potential of other billion-user properties like Messenger and WhatsApp, optionality for faster [free cash flow] growth on greater efficiency on content screening/security costs,” the bank added.

The stock, which ended Wednesday’s session more than 6% higher above $194, soared by an additional 6% in after-hours trading.

Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek

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