Tech Companies – Third Quarter Earnings
Out – Who’s Ahead?

Third quarter earnings for many technology and entertainment companies were released this week.  There were some clear “winners” and “losers” in the market.  So, which companies came out ahead?  Which need to make some turnarounds?

The Winners


Some have considered 2012 a disappointing year for Facebook.  When Facebook went public back in May, initially promising stock prices quickly tanked and there were even lawsuits filed by shareholders who alleged that some of Facebook’s financial information was selectively released to big banks ahead of the IPO.  Even as late as September 2012, Mark Zuckerberg was acknowledging that Facebook’s stock dive was “disappointing”.  But, oh how quickly a tune can change and when third quarter (Q3) earnings were released in October, that tune did change.  Facebook Q3 earnings were nearly $1.26 billion, beating analyst’s expectations.  But more over, Zuckerberg says that he’s even more proud of Facebook’s growth in the mobile market and the fact that Facebook has surpassed the 1 billion active user mark.  This user increase is a 26% year-over-year growth for the company.

The Huffington Post was also singing a new tune this week when it compared Facebook’s growing pains to what Apple experienced.  The magazine even went as far as to title the article “Facebook Resurrection” and deemed it a “dramatic comeback”.


Netflix is another clear winner as this year’s Q3 Earnings were released, showing that the company’s earnings were up $83 million over last year.  This puts Netflix’s revenue at $905 million and 1.16 million new domestic subscribers.  More importantly Netflix saw an increase in the number of users who stream video from the service, which was one of their goals started back in 2011.

Netflix can also be considered a “Cinderella story” like Facebook this year.  It wasn’t too long ago, back in June 2011, the company raised it’s prices and tried “guiding” users to streaming video instead of DVD’s delivered by mail.  At that time, the companies streaming movie options were very limited and many users considered the Netflix member plans to be too high priced.  Some on-lookers even thought that Netflix might be nearing saturation in the U.S. market.  By the newly released third quarter numbers, Neflix appears to be doing just fine.

The Losers


The social game maker, Zynga might be connected to Facebook, but that doesn’t necessarily mean that it is experiencing the same success.  This month, Facebook’s Mark Zuckerberg admitted that Facebook games aren’t doing quite as well as he wants.  This might have something to do with Zynga who makes the once popular Farmville and ChefVille games.

Third quarter statistics show that Zynga pulled in $317 million for the quarter, which sounds fine, but is only a 3% increase year-over-year.  Bookings for the same period were down 11 percent.  This prompted the company to announce layoffs.  Zynga is mostly struggling because gamers aren’t necessarily paying for the games that they play.  Monthly unique payers have decreased from 4.1 million to 3 million.


Amazon also fell short of Q3 estimates this year when it posted a $28 million operating loss.  While this is still a 27% year-over-year increase, Amazon is losing a bundle on LivingSocial to the tune of a $169 million loss.  As always, Amazon is looking on the bright side with a renewed focus on its popular Kindle line and the approaching Christmas season.

You’re always a winner when you go to Eric Wagner Marketing for all of your social media, technology, and Internet news.

Image courtesy of Stuart Miles /

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Eric Wagner

Eric is a CEO with a background in marketing and search engine optimization specialist (SEO). In his free time, Eric enjoys exercise, gardening, technology, a good book, and spending time with family and friends.

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Out – Who’s Ahead?

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