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Facebook ( FB ), a shining star in the tech field, will report first-quarter earnings after the close Wednesday. The company soundly beat Q4 earnings expectations on booming mobile-ad revenue, and Facebook stock is up 16% since then, though it also is down 7% since touching an all-time high shortly after that earnings report, on Feb. 2. The company carries a good IBD Relative Strength Rating of 86, putting it among the top 14% of all stocks in performance the past 12 months. Yet, it sports an Accumulation/Distribution Rating of E, indicating that the big institutions are selling more than buying. The company has posted double-digit growth in revenue, year over year, for more than four years — and analysts say another quarter of double-digit revenue growth is coming. The consensus on Facebook revenue is $5.25 billion, up 48%, says Thomson Reuters. Analysts expect EPS ex items of 62 cents, also up 48%. Facebook is cooking on several fronts, with solid growth in advertising and live video complimenting strong advertising growth in mobile. But in what could be a nightmare scenario , users apparently are tiring of posting personal reflections and updates on their daily lives. A report this month by The Information news website says Facebook is trying to reverse a double-digit decline in “original” posts by users, items about their personal lives for friends to see. The decline could be a long-term threat to Facebook’s primary moneymaker, the central portion of its website, called News Feed, where user posts appear — and which is infused with ads. The report said personal posts were down 21% from mid-2014 to mid-2015. Overall sharing reportedly fell 5.5% during that period, the article said, citing four people with knowledge of the situation. Facebook responded to the article saying the overall level of sharing has remained strong and similar to levels in prior years. But according to The Information, Facebook has set up a team in London to help develop a strategy to stop the double-digit decline. And according to an article by Bloomberg , CEO Mark Zuckerberg has spoken at Facebook staff meetings this year about the need to inspire personal sharing. Zuckerberg announced a 10-year strategy for Facebook at its annual F8 Developer Conference this month. He emphasized pushing its Messenger chat platform deeper into the business world with chatbots, enhancing Live video with virtual reality and expanding the social network to remote regions of the world. Analysts say the monetization strategy of Messenger will closely follow that of Instagram, with both platforms seen becoming multibillion-dollar businesses. Scalper1 News
Scalper1 News