'Pandemic and advertiser boycott create heightened uncertainty': Here's what 3 analysts expect from Facebook's quarterly earnings | Markets Insider

is scheduled to release its second quarter results after markets close on Thursday, and Wall Street fears the recent advertiser boycott may curb the company's recovery.

If the company's previous report is anything to go by, there's still room to please Wall Street come Thursday. Facebook's first-quarter earnings beat revenue and profit estimates, and largely alleviated concerns that ad sales would crumble amid the coronavirus pandemic. Analysts expect the boycott to drive a steep decline in ad revenue growth, but some see the protests as leaving little lasting impact on Facebook's trajectory.

The firm expects results to land largely in line with Wall Street estimates. Strong usage of Facebook and Watch will emerge as second quarter"bright spots," while ongoing protests could draw"cautious commentary," the analysts wrote. Unless revenue falls below expectations, Facebook will likely maintain its guidance for expenses to land between $52 billion and $56 billion through 2020.

"Despite the boycott, we anticipate that engagement has remained strong across the company's social platforms as a result of the pandemic," they wrote. Still, the"pandemic and advertiser boycott create heightened uncertainty" heading into the report's release, the team added. After strong improvements across Facebook's advertising segment through April and May, analysts led by Stephen Ju expect the boycott to slow the company's recovery through the summer. Data also suggest that entertainment, media, dining, and retail ad spending fell less than anticipated. The firm left its estimate for ad spending unchanged at 3% year-over-year growth, adding that a sizable pool of ad partners has remained with the company.

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