Announcement of Increasing Sales Revenues May Yet Signal Changing Fortunes for Both Facebook and Apple

In recent days both Facebook and Apple have independently announced to the market that they have both individually achieved increases in sales revenues for the last quarter, namely: January to March, 2014. 

Specifically the numbers reveal the following stories. With Facebook: 72% sales revenue growth over the same quarter last year, having earned $2.5Billion in the quarter, having increased from $1.46 Billion in the same quarter last year.

With Apple: reported that its sales revenues had risen from $43.6 Billion to $45.6 Billion in the last quarter performance, signifying a rise of 5% in sales revenue over that quarter from last year.

On the surface it would appear then that all is going nicely for both corporate giants but if we take a little closer look at the trend data behind the absolute numbers, it is possible that another story is starting to emerge. 

Specifically that Facebook’s new advertising strategy appears to be yielding dividends and despite the fact that despite the unprecedented $19 Billion dollar payout for WhatsApp, Facebook looks to be years off finding out how to make it pay based on its no advertising central mantra.

On the other hand Google’s result although squarely in the credit side of the accounting ledger represents a genuine slowing of the growth rate and continues the trend over the last few quarters that confirm the heady days of off the charts growth may for at least the time being, be over. 

These developments this week tie in nicely with a recent discussion in a recent post on this blog that spoke of looking beyond the absolute values in the P&L and Balance Sheets to gain a broader and more insightful view of the true state of play for the business.

It would appear that for the first time in a while, Face book and Apple despite both experiencing top line sales growth, face rather different short term futures, and while Apple contemplate reduced mobile sales revenues in Asia and especially China in the near future, Facebook can sit back and enjoy its moment in the financial sun.

So until next time, good luck and good marketing.

Regards,
Daniele.