Facebook's Earnings Report: Here's What You Need To Know

Facebook Inc FB is scheduled to report its second quarter results after Wednesday's market close.

Here is what you need to know heading into the print.

Bank Of America: Facebook Named ‘Top Investment Idea'

Justin Post of Bank of America reiterated a Buy rating on shares (with an unchanged $105 price target) in a note on July 21 while adding the name to the "US 1 List" which is a collection of Bank of America's "top investment ideas."

Facebook has "lots of levers to pull" to continue growing over the coming years. The analyst noted Facebook's "strong" mobile position with a 20 percent share of total Internet minutes, improving ad targeting, new ad formats (including video), and a ramp of Instagram monetization beginning in the Fall.

"We see Facebook as a share gainer, well positioned for increasing ad monetization and with easier comps in 2Q, it is possible that ad rev growth accelerates," Post wrote. "We anticipate a continued move to high-quality growth stocks and favor the upside case."

Facebook Above $100 Per Share? It's Possible

Shares of Facebook hit an all-time high of $99.24 during Monday's trading session and also posted an all-time high close of $98.39. Since then, shares lost momentum and dipped below the $94 mark on Tuesday, before bouncing back. As of mid-Wednesday, shares were struggling to trade above the $96 level and were only 0.50 percent higher for the day.

Speaking to Benzinga on Tuesday, TD Ameritrade's Chief Strategist JJ Kinahan noted that the options market is pricing an 8.5 percent move in Facebook's stock following the release of its results.

Taking Facebook's current price of $95.72, investors can expect shares of Facebook to either surge above the $100 mark or plunge below the $90 mark and erase the past two weeks of gains.

Related Link: It's All On Facebook, LinkedIn To Help The Social Media ETF

Breaking Down The Numbers

The Estimize community (based on 412 estimates) is expecting Facebook to earn $0.49 per share on revenue of $4.029 billion. Both these figures are above Wall Street's consensus estimate that is calling for the company to earn $0.47 per share on revenue of $3.994 billion.

Facebook last reported its results on April 22. The company earned $0.42 per share in its first quarter, $0.02 better than expected while revenue grew 41.6 percent from the same quarter a year ago to $3.54 billion but fell $20 million short of what analysts were expecting.

Facebook broke down its first quarter operational highlights (below) and investors will be looking for similar growth in the quarter.

• Daily active users (DAUs) were 936 million on average for March 2015, an increase of 17 percent year-over-year.
• Mobile DAUs were 798 million on average for March 2015, an increase of 31 percent year-over-year.
• Monthly active users (MAUs) were 1.44 billion as of March 31, 2015, an increase of 13 percent year-over-year.
• Mobile MAUs were 1.25 billion as of March 31, 2015, an increase of 24 percent year-over-year.

Similarly, Facebook's first quarter financial highlights (below) can also serve as a guide as to what to expect in the second quarter.

• Revenue from advertising was $3.32 billion, a 46 percent increase from the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, revenue from advertising would have increased by 55 percent.
• Mobile advertising revenue represented approximately 73 percent of advertising revenue for the first quarter of 2015, up from approximately 59 percent of advertising revenue in the first quarter of 2014.
• Payments and other fees revenue was $226 million, a 5 percent decrease from the same quarter last year.