In a report published Thursday, SunTrust Robinson Humphrey analyst Robert (Bob) Peck commented on Facebook Inc FB's first quarter results, highlighting various strengths while offering key themes to follow in the remainder of the year.
Positives From The Quarter:
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- Global average revenue per user rose 37 percent year over year ex-foreign exchange (versus 39 percent in the fourth quarter).
- Video views per day rose to four billion (from three billion in October). This is important since frequency of video in stream helps determine video ad load.
- Facebook realized one billion daily searches.
- Over two million advertisers operate on the platform.
- Ad platform showing strong engagement.
- Second quarter foreign exchange impact will be greater than the seven percent hit in the first quarter.
- High-end of spending guidance was lowered to 60 percent from 65 percent, capital expenditure remained the same at around $3 billion and the returns on these investments may take years to materialize.
- Investor expectations remain high and some may overestimate the timing of adoption and roll out of new products (i.e Video and Instagram monetization).
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