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MEDIA CAN BE BEAT, REVENUE
EXPECTATIONS LAST NIGHT DID
SHE EXPEDITE FALLOUT FROM THE
PRIVACY SCANDAL YESTERDAY
FACEBOOK REPORTED ADJUSTED
EARNINGS PER SHARE 1.69 ON
REVENUE 11.97 BILLION DOLLARS,
THAT WAS FIRST QUARTER 2018.
SHARES OF FACEBOOK, RIGHT NOW,
ARE UP, 7% IN PREMARKET,
JOINING US RIGHT NOW ON
TELEPHONE IS THE FOUNDING
PARTNER OF APPLE ONE CAPITAL
PARTNERS DAN NILES YOU
PREDICTED WOULD BEAT REVENUE
EARNINGS EXPECTATIONS TAKE
AWAY FROM NUMBERS.
>>.
ON THE PHONE: QUITE HONESTLY
BETTER THAN I WAS EXPECTING
LOOK AT REVENUES FIRST, AND
REVENUES YEAR-OVER-YEAR JUNE
QUARTER UP 45%, AND SEPTEMBER
AND DECEMBER QUARTERS,
ACCELERATED UP 47%, WHAT IS
INTERESTING IS EVEN WITH ALL
THE NEGATIVE PUBLICITY
ACCELERATORED, KEEP OPERATING
INCOME 14% FOR MARGINS BETTER
THAN EXPECTED -- OVER 20% --
SO IT -- REALLY HARD TO FIND A
WHOLE LOT NEGATIVE IN THE
REPORT.
>> WHAT ABOUT EXPENSES GOING
FORWARD, IN THIS REGULATORY
SCRUTINY GOING TO SEE NEW
RULES REGULATIONS TO ADHERE TO
THAT WILL CHANGE THE REASON TO
OWN THE STOCK BECAUSE EXPENSES
ARE HIGHER?
ON THE PHONE: I REALLY DON'T
THINK SO HERE IS A WAY TO
THINK ABOUT IT EVEN THOUGH
EXPENSES THEY GUIDED TO UP 50
TO 60% ORIGINALLY UP 45 TO 60.
ESTIMATES ARE GOING UP AFTER
THIS BECAUSE THEY BEAT
OPERATING MARGINS SO MUCH EVEN
THOUGH GUIDING EXPENSES HIGHER
MOST STREET IS RAISING PPS THE
SECOND THING I AM SURE THERE
WILL BE SOME REGULATIONS
SAYING THEY NEED TO ADHERE TO
OBVIOUSLY AT THE TALK ON CALL
ABOUT GENERAL PROTECTION
REGULATIONS COMING OUT ON MAY
25th IN EUROPE BUT THE
INTERESTING THING IS THEY
STAYED EVEN WITH THOSE
REGULATIONS, THEY DON'T
ANTICIPATE THOSE CHANGES
REALLY SIGNIFICANTLY IMPACTING
OUR REVENUE, THEY DO THINKDALE
ACTIVE USERS COULD BE DOWN IN
SECOND QUARTER BUT YOU KNOW
THAT IS REALLY NOT AFFECTING
THE REVENUES QUITE HONESTLY
THE REGULATIONS WITH THEM IT
WILL IT WILL HELP MAKE THEIR
SITE A LOT SAFER, AND SOME
EXTENT GOING TO IMPACT THEIR
SMALLER COMPETITORS A LOT MORE
THEY DON'T HAVE SAME RESOURCES
AS FACEBOOK TO COMPLY WITH
THAT.
>> "THE WALL STREET JOURNAL,"
I LIKE TO TALK ABOUT POTENTIAL
SMALLER COMPETITORS NORMALLY
THOSE PROFIT MARGINS ATTRACT
COMPETITION WHO IS IT CAN
CHALLENGE FACEBOOK AMONG
STARSUPS OR EXISTING TECH
GIANTS MOVING INTO THEIR
BUSINESS.
ON THE PHONE: YOU OBVIOUSLY
KNOW THE CHARACTER YOU'VE GOT
TWITTER, SNAPCHAT OBVIOUSLY
TWO PUBLIC COMPANIES TALKED
ABOUT MOST OFTEN THEY HAVE
BEEN COMPETING SINCE THE
BEGINNING AND YOU'VE OBVIOUSLY
SEEN THIS MARKET, IS -- NOT
NECESSARILY WINNER TAKE -- BUT
HE EVOLVING THAT WAY AS
FACEBOOK EXECUTES, NOT JUST
GROWING REVENUE BUT HIGHLY
HIGHLY PROFITABLE THEY HAVE
46% OPERATING COSTS -- AND SO
YET REMEMBER TO SOME EXTENT
ARE A START-UP IN DIFFERENT
BUSINESSES, SO WE TALKED ABOUT
FACEBOOK THEY GOT 2.2 BILLION
USERS INSTAGRAM 800 MILLION
USERS THAT IS GREAT WE DON'T
TALK ABOUT THAT MUCH IS THE
1.3 BILLION USERS FOR FACEBOOK
MESSENGER STARTED TO MAKE
OWNER OFF NO MONEY OFF 1.5
BILLION TO SOME EXTENT TWO
START-UPS WITHIN COMPANY
BETWEEN MESSENGER AND WHAT'SUP
HAVE NOT STARTED TO MONETIZE
THAT GIVEN ME A LOT OF COMFORT
ESPECIALLY WHEN YOU LOOK AT
MULTIPLES TRADING AT 20 TIMES
NON -- MARKET UP 17 GOING TOP
LINE 50%.
>> YOU SAID I'M SORRY, JUST A
VENTURE CAPITAL ARE NEW
COMPETITORS BEING FUNDED IF
NOT WHY NOT IS FACEBOOK SEEN
AS SO DOMINATE THAT THAT WON'T
WORK?
>> I MEAN I THIS I PEOPLE ARE
TRYING TO WORK AROUND EDGES
YOU HAVE TO REMEMBER WITH
FACEBOOK, THERE IS SOMETHING
PRETTY UNIQUE THE NETWORK
EFFECT, YOU ARE NOT GOING TO
GET OFF FACEBOOK, AND GO TO
GOOGLE PLUS, IF YOUR FRIENDS
AROUND THE THERE YOU CAN'T
E-MAILS SWITCH IF YOU ARE
DEALING WITH GOOGLE FOR
EXAMPLE SOMEBODY CAM WITHOUT A
MUCH BETTER SEARCH ENGINE
NOTHING TO STOP YOU FROM GOING
TO THE OTHER THE PROBLEM WITH
THIS EVEN IF SOMEBODY DIDN'T
DEVELOP A GREAT OTHER
ALTERNATIVE SOCIAL MEDIA SITE
YOU ARE NOT GOING TO MOVE
UNLESS ALL FRIENDS MOVE TO IT
THAT IS PROBABLY NOT GOING TO
HAPPEN IMMEDIATELY.
MARIA: QUICK INTEL MICROSOFT
OUT TONIGHT GOOD QUARTERS WHAT
ARE YOU EXPECTING.
ON THE PHONE: ONE OF OUR
LARGEST POSITIONS WE LIKE IT
QUITE A BIT -- THE KEEPER
ENTERPRISE DEMAND HAS BEEN BAD
LAST COUPLE YEARS STARTED TO
IMPROVE FOURTH QUARTER I THINK
GOING TO BE VERY GOOD FOR THIS
YEAR, SO WE LIKE INTEL A LOT A
LOW MULTIPLE AS WELL IN THIS
ENVIRONMENT 14 TIMES, SO WE
LIKE IN A QUITE A BIT AND
MICROSOFT, SIMILARLY WE THINK
SHOULD HAVE A PRETTY SOLID
QUARTER, QUITE A BIT HIGHER 24
TIMES, SO NOT AS TO US AS