Today: Facebook earnings show strong mobile growth and Yelp exhibits big leap in revenues, with LinkedIn ready to take stage. Also: Apple falls amid rumors of iOS 7 delay, Wall Street's winning streak ends.
The lead: Facebook keeps focus on mobile, Yelp stock jumps after earnings
Silicon Valley's social networks took over the earnings parade Wednesday, with Facebook and Yelp opening up their books for the first quarter a day before LinkedIn does the same.
Facebook was the most anticipated offering of the day, with investors anxious for more information on the company's mobile efforts after showing last quarter that nearly a quarter of its advertising revenue was derived from the mobile offering and more users were accessing the site on mobile devices than personal computers. Facebook's numbers showed continuing growth: 30 percent of the company's advertising business, roughly $375 million, was derived from mobile in the first quarter, up about 23 percent, and 751 million members accessed the site every month on mobile devices, more than the 665 million PC monthly active users. Nearly 190 million users accessed Facebook only on their mobile devices, the company said.
"Their mobile business is probably bigger than any mobile business on the planet other than the (wireless telecommunications) carriers and Google," Wedbush analyst Michael Pachter pointed out to the Associated Press.
Overall, Facebook reported profits and revenues mostly in line with analyst predictions. The Menlo Park social network brought in net income of $219 million -- 12 cents a share after removing one-time costs -- on revenues of $1.46 billion. Analysts polled by Thomson Reuters expected earnings of 13 cents a share on revenues of $1.39 billion.
With Facebook's revenues from its PC business seeming stagnant, however, the focus was completely on the mobile part of Wednesday's announcement, and executives and analysts seemed pleased with Facebook's performance.
"I'm very encouraged on how Facebook's positioning itself for mobile from both a usage and revenue standpoint," Telsey Advisory Group analyst Tom Forte told Bloomberg News. "It's clear to me that the company understands the importance of mobile."
Facebook shares, which ended the day with a 1.2 percent drop at $27.43, changed little in after-hours trading, as a warm response to mobile growth may have been counteracted by the news that the company's chief accounting officer is departing.
Meanwhile, 30 miles north of Menlo Park, San Francisco-based Yelp experienced big gains in its stock price after the bell, as its earnings showed solid growth for revenues, lessening losses and continued success on mobile devices. Yelp reported revenues of $46.1 million, up 68 percent from the same quarter a year ago, and a net loss of 8 cents a share, a leap from the 31 cents a share it lost a year ago.
Yelp also reported a record 102 million monthly unique visitors, with 10 million mobile devices reached, leading to 36 percent of its local ads landing on mobile devices. To continue that growth, Yelp also announced that it launched mobile display ads in the first quarter of 2013.
"We will continue to focus our product innovation around the mobile experience and new features to better serve the consumer and local business owners," CEO and co-founder Jeremy Stoppelman said in Wednesday's news release.
Yelp's results were similar to Facebook's in that they were slightly below expectations on profit but with higher revenues: Analysts expected the company to lose 6 cents a share on revenue of $44.6 million, according to Thomson Reuters. Still, shares jumped more than 11 percent in late trading, topping $28 a share after closing the regular session with a 2.8 percent decline at $25.30.
Another social network takes center stage Thursday, as professional-networking company LinkedIn reports earnings. The Mountain View company's stock reached all-time intraday and closing highs Wednesday, moving as high as $195.50 and closing with a 1.4 percent gain at $194.82 after introducing richer media capabilities to users' profiles, while CEO Jeff Weiner told a Palo Alto venture summit that the site plans to be more relevant to the daily lives of users.
Silicon Valley stock report: iOS rumors, tablet report hurt Apple
Wall Street's run of gains came to an end Wednesday, as the positive outlook on the economy from Tuesday turned around after ADP's prediction of April job growth came in lower than expected. The Federal Reserve also sounded a sour note, saying that the payroll tax hike and government's severe budget cuts are harming the economy, not a strong lead-in to Friday's April job-growth report.
Tech stocks were not immune to the downfall, with the Nasdaq declining 0.9 percent and the SV150 index dropping 0.7 percent. Apple's recent hot streak came to an end, as the Cupertino company's stock fell 0.8 percent to $439.29 amid reports that its newest mobile operating system will be delayed, with Bloomberg News laying the blame at the feet of famed executive Jonny Ive. The latest quarterly tablets report from IDC also showed Apple's market share in that sector is continuing to decline despite increased shipments.
Netflix dropped 1.4 percent to $212.91 as 2,000 movies reportedly disappeared from the company's streaming service with the onset of May, though the Los Gatos firm's Twitter account celebrated the movies that were arriving instead. Google declined 0.5 percent as the company's European arm was once again called before British politicians after a Reuters report questioned previous statements a company executive made. The company's Google Glass offering received warm reviews from users, however, and Morgan Stanley believes another effort from the Mountain VIew search giant could be worth hundreds of billions of dollars.
Yahoo declined 1.7 percent to $24.30 after a French official revealed that he had stood in the company's way of a deal for French video site Dailymotion, and VMware dropped 0.1 percent after it offloaded some more of its business. On the positive side, Palo Alto's Jive Software gained 4.1 percent after adding to its repertoire, and Advanced Micro Devices jumped 14.2 percent higher on very heavy volume.
Up: AMD, Jive, SolarCity, LinkedIn, Oracle, Intuit, Symantec, Intel
Down: Palo Alto Networks, SunPower, Ruckus, Yelp, Cisco, NetApp, Electronic Arts, Yahoo, Workday, Netflix, Juniper, Tesla, Facebook, Hewlett-Packard, Gilead, Adobe, Apple, Google
The SV150 index of Silicon Valley's largest tech companies: Down 8.73, or 0.71 percent, to 1,216.93
The tech-heavy Nasdaq composite index: Down 29.66, or 0.89 percent, to 3,299.13
The blue chip Dow Jones industrial average: Down 14.87, or 0.93 percent, to 1,582.7
And the widely watched Standard & Poor's 500 index: Down 138.85, or 0.94 percent, to 14,700.95
Also in the news: A small-time blockbuster, privacy ratings
Not springing higher: Cleantech company Silver Spring Networks continued to show earnings degradation in its first report as a public company. ... Genius moves?: The founders of Rap Genius said they are looking at an enterprise offering of their annotation software, and launched a new offering dubbed News Genius. ... The world's smallest movie: IBM technicians working in San Jose created a stop-motion animated movie using just molecules. ... Who has your back?: The Electronic Frontier Foundation released its annual report of tech companies' privacy standards, giving top ratings to Twitter and Sonic.net. ... Desperately seeking awesomeness: DreamWorks bought Awesomeness TV, a YouTube channel that sought to take on Nickelodeon and other standard fare. ... Mozilla unhappy with spying: The Mozilla Foundation lashed out at a British company it says is falsely representing as a Firefox browser for state-sponsored espionage. ... Another one bites the dust: As observers wait for electric car company Fisker Automotive to file for bankruptcy, rival Coda made that move Wednesday.
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.