Facebook, Apple Post Earnings Surprises - And More! - Analyst Blog

After the bell Wednesday, Facebook FB beat Q1 earnings estimates on both the top and bottom lines. Earnings of 25 cents per share (discounting for stock-based compensation) on $2.50 billion beat expectations of 18 cents per share and $2.36 billion in sales. But the fly in the ointment -- or at least the question that arose once earnings numbers were reported -- was the announcement that Facebook CFO David Ebersman would be stepping down later this year.

Of immediate concern was why a high-profile CFO resignation would so soon follow recent acquisitions of WhatsApp and Oculus, which provided billions in Facebook stock as currency to fund these deals. The official note via the company is that Ebersman will be returning to the high-growth healthcare sector. This reason more than any other, has kept after-market gains of Facebook relatively muted. Shares have just made back regular Wednesday trading losses.

This is especially true considering that Facebook outperformed in the most highly-watched areas of the company's business: ad revenues of $2.27 billion was up 82% year over year, mobile advertising revenues hit 59% compared to 30% a year ago, and daily active users (DAU) topped 800 million for the first time to 802 million, up from 790 million expected. Basically a solid beat any way you slice it; this marks Facebook's third positive earnings surprise in the last four quarters.

The conference call will likely grill Ebersman's decision to leave Facebook. Otherwise, whether WhatsApp and Oculus will prove worthy of their high price tags is a discussion likely for another day.

Apple Inc. AAPL also posted earnings after the bell Wednesday, and beat expectations as well. Earnings hit $11.62 (before non-recurring items) on $45.6 billion in revenues, beating expectations of $10.22 per share and $43.4 billion in sales. This is the biggest Apple beat in quite some time. But... then the company announced a 7 to 1 stock split to AAPL share owners as of June 2nd.

Say what?! Big surprise here. Dividing Apple shares by 7 will bring AAPL share prices below $100 for the first time in ages. Of course, it doesn't add any actual value to the company, but CEO Tim Cook is betting a lot more folks who may have blanched at the $500+ price tag will now hop on board. Short of unveiling a major new product, this was about as big a "positive" announcement as the company could have made. Apple shares are up 7.5% in after-hours trading.

Sales of the iPhone were very impressive in the quarter: 43.7 million units sold, when the consensus was for 38.5 million. Tablets took it on the chin, however: only 16.4 million iPads sold in the quarter, where analysts were looking for numbers up near 20 million. Cook mentioned supply and demand issues which will likely be addressed on the call. Guidance was on the low side, of course, but that's par for the course for Apple.

So there you have it: two high profile stocks reporting after the bell -- two real knockout artists, to consider their history of earnings beats, in fact -- both companies topped expectations, and then trumped them with even bigger news. This has been fun!