Market Overview

What Should Traders Expect From Facebook's Earnings?


Facebook Inc (NASDAQ: FB) is scheduled to report its second quarter earnings after the closing bell on Wednesday. R.W. Baird tech specialist, Rob Oliver, was on CNBC to discuss what kind of numbers are investors expecting from the company to release.

Set Up Very Well Here

"I think sentiment has shifted pretty dramatically in large-cap Internet as a whole and specifically relative to Facebook over the past quarter," Oliver began. "All you need to do is look at a chart of Facebook and look at a chart of Twitter and you will see them moving in opposite directions starting about last quarter's earnings report in the end of April, early May timeframe."

"So it would be wrong to say expectations aren't high for Facebook. But that having been said, expectations were high for Google and they were high for Amazon and both were able to outperform those expectations."

He continued, "So we feel as if Facebook is set up very well here and of course there are some massive tailwinds for the business that irrespective of what happens this current quarter, we think are really going to be a great source of growth for Facebook over the next few years."

Video Monetization: Tremendously Huge Trend

Oliver was asked what he is expecting to hear from Facebook on the advertising front. He replied, "Baird's analyst Colin Sebastian does a lot of third-party checks throughout the quarter and our third-party checks have been consistently very positive on Facebook's advertising traction across the board. The one area that I would point to would be video."

"We're very early in what is a tremendously huge trend of online video monetization. There is a over $65 billion television upfront market every year and as those dollars move online from traditional network advertising, guys like Facebook and Google are the beneficiaries," Oliver said.

Latest Ratings for FB

Oct 2020Truist SecuritiesMaintainsBuy
Oct 2020Wells FargoMaintainsOverweight
Oct 2020MizuhoMaintainsBuy

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