Wall Street Lukewarm At Best After Facebook’s Fourth-Quarter Earnings Call

The sentiment on Wall Street following Facebook’s fourth-quarter earnings call Wednesday was more negative than positive, with many analysts pointing to the social network’s staggering spending forecast for 2013 in lowering their ratings.

The sentiment on Wall Street following Facebook’s fourth-quarter earnings call Wednesday was more negative than positive, with many analysts pointing to the social network’s staggering spending forecast for 2013 in lowering their ratings.

The company’s costs and expenses skyrocketed during the fourth quarter, driving its net income down. Facebook spent $1.06 billion in the recent quarter, up 82 percent from the previous-year period, causing GAAP (generally accepted accounting principles) net income to plunge to $64 million, versus $302 million in the same quarter of 2011.

Forbes gathered commentary from several analysts on the social network’s earnings call:

  • Brian Pitz and Brian Fitzgerald, Jefferies: They lowered their rating on Facebook to “hold” from “buy,” and lowered their target price to $30 per share from $32, writing, “We are downgrading … as management warns of significantly higher expense levels in 2013 as a result of aggressive hiring and investment plans.
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