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What to Expect from Facebook's (FB) Q3 Earnings

Shares of Facebook FB dipped 2.26% during regular trading hours Monday as part of a larger market decline, which included fellow tech giants Amazon AMZN, Netflix NFLX, and Google GOOGL. With that said, Facebook stock could jump if the company is able to impress investors with strong Q3 financial results Tuesday.

FB Overview

Facebook, along with fellow social media power Twitter TWTR, has come under fire for its role in the spread of misinformation and “fake news.” Both companies have spent more to combat these problems, which should help their platforms remain more attractive to users in the long-run.

Facebook’s commitment to spend more money to secure its platform is expected to show up on its income statement. Last quarter, Facebook said its operating margin is expected to fall to the "mid-30s on a percentage basis" over a more than two-year period. Mark Zuckerberg’s firm posted an operating margin of 44% in Q2, which already marked its lowest level in the past five quarters.

Despite these concerns, Facebook’s Q3 user grow estimates aren’t too bad. More importantly, Facebook’s average revenue per user in the U.S. and Canada—where it made nearly 50% of its revenues last quarter—is projected to soar 43% from $21.20 in the year-ago period to hit $30.31 (also read: User Growth, ARPU & Other Key Q3 Facebook Estimates).

Facebook’s overall Q3 revenues are projected to jump by 33.8% to reach $13.81 billion, based on our current Zacks Consensus Estimate. The other end of the income statement looks less promising. Facebook’s adjusted quarterly earnings are expected to sink 8.2% to touch $1.46 per share.

With that said, we still need to know if Facebook might top our quarterly earnings estimate, as that could help FB stock, especially in the near-term. Luckily, we can turn to our exclusive Earnings ESP figure to do so.

The Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

Facebook is currently as a Zacks Rank #3 (Hold) that sports an Earnings ESP of -2.89% Unfortunately, this means that our model is inconclusive. It is, however, worth noting that until last quarter’s $0.01 per share miss, Facebook had topped our quarterly earnings estimates in 11 straight periods.

Facebook is scheduled to release its Q3 financial results after the closing bell on Tuesday.

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Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

How to Grow Your Facebook Page and Amazon Earnings

Linking your Etsy store to Facebook is an easy way to reach more potential shoppers.

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By mixing the use of your Facebook page and your Amazon Affiliate links you have the potential to pump out some real earnings. Facebook pages give you the access to your audience and, if you treat them well, the Amazon links allow you to earn a small commission on each purchase made through the links. As with most considerations when building a business, the cultivation of an online audience takes time and earning money from them takes effort.

Find Your Audience

Facebook pages give you a way to connect with a very specific audience. The main way to grow your Facebook page is by offering content that your audience wants to see. If they like and comment on the posts then you will develop a core of faithful audience members that then want to share their passion with others. Whether you aim to inform, amuse, educate or motivate, your main goal with a Facebook page is to offer something of value to your followers. The best way to make that happen is for your page to be about something you're passionate about, so that you keep posting quality content that they want to share.

Grow Your Influence

Once you've started the Facebook page and you're putting out new and interesting content you can work to grow the page's audience. Look for other pages that are similar to yours and start developing a relationship with the people on that page, both the administrators and the followers. For example, if you offer amusing memes for your city, start connecting with page managers that do the same for neighboring cities. Don't forget to let your Facebook friends know what you're up to. Put your page information on your profile so that your friends who are interested can follow your page and share it with their friends. Make sure you have links to your Facebook page on your website, on your blog and in your email signature. Make it easy for people to find your page and follow what you're doing.

Connect the Products

As you're posting interesting, thoughtful or amusing content to your Facebook page, don't forget to connect your readers to things they might want. For example, if you post humors memes, you might point them to a book that contains more of the same. If you share tidbits about science you might highlight a new science toy for kids. The connection between your page and the products needs to be natural. Ultimately, it needs to feel like a trusted friend is telling them about products that work well. The posts about products need to add as much value to your Facebook followers as any of your other posts.

Earn a Profit

By using the Amazon Affiliate program you can post those links to products through a specially identified link that tells Amazon to give you a commission -- between four and ten percent -- of the price of the product. Use a link shortener like Bit.ly, Goo.gl or Fur.ly (links in Resources), to both make the long affiliate links shorter and to allow you to track which links get the most clicks for you.