Internet Stocks Earnings Reports: FB Vs. AMZN

It’s been an absolutely loaded week for earnings reports, including two of the most notable internet brands in the world reporting their second-quarter results. Both Facebook (NASDAQ:FB) and Amazon (NASDAQ:AMZN) impressed investors, but which company really stole the show this week?

Facebook was the first of the two to report, releasing its second-quarter results after the closing bell Wednesday. The company posted earnings of 76 cents per share, beating our Zacks Consensus Estimate of $0.62. Facebook also saw revenue figures of $6.436 billion, smashing our estimate of $6.008 billion.

Amazon reported after the bell on Thursday, with earnings coming in at $1.78 per share and revenues at $30.4 billion for the quarter. Our estimates called for earnings of $1.14 per share and revenues of $29.7 billion, meaning that Amazon also posted an impressive double-beat.

The key for both companies comes deeper in their respective reports. For Amazon, investors were hungry for updates on Amazon Web Services (AWS), the company’s booming cloud services offering. AWS shined once again, with revenues from the segment up 58% year-over-year to $2.886 billion. That also represented growth of 12% from last quarter.

(Also Read: Amazon Q2 Earnings In-Depth: AWS Grows 58%)

Facebook’s key stats were also impressive. Most notably, the company continues to see strong growth in mobile advertising. Mobile advertising revenue represented 84% of total ad revenue for the quarter, which was up from 76% last year. It’s clear that of Facebook’s 1.13 billion daily active users, the majority are using the site on mobile devices and absorbing advertisements through that medium.

Head-to-head, it’s tough to call a winner between these earnings reports. We really have to look forward to determine which stock is the better pick right now. Amazon did announce its third-quarter guidance, and the company expects net sales between $31.0 billion and $33.5 billion. Our current estimate calls for revenues of $31.62 billion in the quarter.

Amazon’s revenue guidance fits right into the range that we previously expected. On the other hand, Facebook’s performance inspired analysts to adjust their estimates upward. This week we have seen three positive revisions for Facebook’s current-quarter and next-quarter earnings.

With three positive revisions and an earnings beat of over 22%, Facebook quickly jumped to a Zacks Rank #1 (Strong Buy) after sitting at a Zacks Rank #3 (Hold) before its earnings report.

The Zacks Rank system is a proven strategy that puts an emphasis on earnings estimate revision activity. Although both Amazon and Facebook impressed this week, Facebook’s strong Zacks Rank gives it the edge in this head-to-head.