Facebook Inc. Jumps, Qualcomm Inc. Dives as Market Indexes Tread Water

By Demitrios KalogeropoulosFool.com

After a whipsaw session, stocks ended the day just slightly lower. The S&P 500 lost 0.11% and the Dow Jones Industrial Average lost a tiny 0.02%.

^INX data by YCharts

Continue Reading Below

Today's economic calendar was light -- but tomorrow's isn't. Friday morning brings the highly anticipated October jobs report announcement. Economists expect to see 190,000 jobs added in the month with unemployment down to 5.1%. This report is particularly important since it will play a key role in informing the Federal Reserve's decision on a potential interest rate hike in December.

Meanwhile, investors' focus stayed on a torrent of third-quarter earnings releases from corporate America. Social media giant Facebook found a new all-time high after its report, while chip titan Qualcomm sunk to a multi-year low after its announcement.

Facebook dominates mobile advertising Facebook shares today spiked to a new-all time high and its market capitalization passed the $300 billion mark. That puts the young company's valuation solidly above such blue chip giants as Procter & Gambleand Wells Fargo.

The catalyst for the latest stock jump was a surprisingly strong third quarter report out of the social media leader: Facebook beat Wall Street's sales forecasts as revenue surged 41% higher.

Image source: Facebook.

The base of monthly active users grew to 1.55 billion, or 14% over the prior year. And more than 1 billion people around the world now login to the service on a daily basis. "We had a good quarter and got a lot done," CEO Mark Zuckerberg said.

Those operating successes helped power huge sales gains as advertising revenue soared 45% higher, to $4.3 billion. Facebook is dominating the market for selling online mobile ad space, which has expanded to 78% of its business, up from 66% last year. And the latest results show that the company still has room to dramatically expand profitability in this area: Average ad prices rose 61% this quarter.

As for the future, management sees video as a massive opportunity, given that it now hosts 8 billion daily video views across its service. "Over the next few years, video is going to be some of the most engaging content online, and by continuing to innovate here, we have a chance to build the best place to watch and share videos," Zuckerberg told investors in a conference call.

Qualcomm lowers expectations Qualcomm's stock lost 15% -- enough to make it today's worst performer on the S&P 500. The chip giant posted fiscal fourth-quarter earnings results before the opening bell. And while the headline numbers beat expectations, they still weren't pretty. Quarterly revenue slumped by 18% to $5.5 billion and net income dove 44% lower to $1.1 billion.

Yet Qualcomm managed a few important financial and operating wins in the fiscal year that just closed. Chip shipments rose 8% and total reported device sales were up 3%.

Qualcomm's headline year-over-year results. Source: Qualcomm investor presentation.

The company also cut a hefty $1.4 billion out of its annual expense spending while sending boatloads of cash back to shareholders. Qualcomm returned $11 billion through share repurchasing and $3 billion through dividends over the last four quarters.

Still, Wall Street wasn't happy with management's forecast for the fourth quarter that called for a sales slump of as much as 27% and an income drop of as much as 40%. Executives added further uncertainty into the mix by ending their practice of issuing a full-year outlook on these metrics.

But, even without an official company forecast, investors know not to expect any quick improvement in the business. Qualcomm said that it hopes to return to "an improving financial trajectory," but not until the end of the fiscal year that just began.

The article Facebook Inc. Jumps, Qualcomm Inc. Dives as Market Indexes Tread Water originally appeared on Fool.com.

Demitrios Kalogeropoulos owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook, Qualcomm, and Wells Fargo. The Motley Fool has the following options: short January 2016 $52 puts on Wells Fargo. The Motley Fool recommends Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.