All Eyes On Facebook Inc(NASDAQ:FB)

earningsDiane Alter: Facebook Inc (NASDAQ:FB) stock is down about 1% today ahead of its Q4 earnings report, due out after the bell.

Here are the estimates:
  • Facebook is expected to report net income of $706.06 million, or earnings per share (EPS) of $0.20, up from $426 million, or EPS of $0.03, in the same quarter a year ago.
  • Excluding one-time events, forecasts are for the company to post EPS of $0.27, compared with $0.17, a nearly 60% increase
  • Revenue for the October-December period is anticipated to come in at $2.32 billion, up from $1.59 billion a year ago, thanks to a new ad platform that drew advertisers over the busy holiday season.
  • For the full year, analysts are looking for EPS of $0.84 on revenue of $7.63 billion. That compares to EPS of $0.53 on revenue of $5.09 billion in 2012, up 58% and 50% respectively.

Today’s earnings report is a big factor in where FB stock – which doubled in 2013 – will go in 2014. While an earnings beat could propel the stock near the $60 a share mark, a miss could trigger a more drastic plunge.

Here’s what investors should watch.

Facebook (FB) Earnings: Watch the User Count

One bad sign ahead of earnings: multiple news reports have been telling us for months that teens are fleeing Facebook at a rapid rate for rival sites.

Digital consultancy iStrategy Labs released a study midmonth revealing just how many teens have bolted Facebook – and the numbers were ugly.

The social networking site currently has 4,292,080 fewer high-school-aged users and 6,948,848 fewer college-age student users than it did in 2011. That’s more than 11 million users who have left in just two years’ time.

recent study from Piper Jaffray found that fewer teens say Facebook is “important to them.” Just 23% of teens in the October 2013 study consider Facebook the most important site, a 42% decline from a year earlier.

Fickle teens are turning away from Facebook because of boredom, oversharing friends, and concerns about parents’ prying eyes. In addition, its massive size (1.1 billion worldwide members), privacy risks, and inclination to provoke drama has made the site a social burden.

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