Facebook hit Wall Street's bullseye on earnings and revenue was a slight beat but the stock fell below its all-time low of $25.52 a share in after-hours trading as worries about its future growth persist.
"It was a decent quarter," said Daniel Ernst, analyst at Hudson Square Research. "I think people's real fear was it would fall off a cliff: it didn't. They've got a real business there, it's just not growing as fast as it used to." (Read more below video.)
During regular-hours trading, Facebook shares fell 8 percent. After the earnings announcement, the company's shares (FB) initially rose then pulled back, falling below that all-time low. (Click here to get the latest quotes for Facebook.)
The company posted second-quarter earnings excluding items of 12 cents per share on revenue of $1.18 billion.
Facebook posted a net loss of $157 million, or 8 cents a share in the second quarter, due to hefty stock compensation charges related to its IPO, compared to net income of $240 million, or 11 cents, in the year-ago quarter.
Analysts had expected the company to report earnings excluding items of 12 cents a share on $1.15 billion in revenue, according to a consensus estimate from Thomson Reuters.
Worries about Facebook's report were ratcheted up following a grim outlook a day earlier from game-development company Zynga whose games such as "FarmVille" and "CityVille" made up 12 percent of Facebook's revenue last year.
Zynga's stock (ZNGA) plummeted after its dim outlook prompted several analyst downgrades and questions about its long-term relevance. After the Facebook report, Zynga shares also skidded. (Click for the latest after-hours quote on ZNGA.)
This is Facebook's first earnings report since its botched initial public offering in late May. During its first day of trading, Facebook saw its debut marred by Nasdaq glitches that delayed trading. Since then, the stock has slid from its $38 initial offering price.
In the report, the company said its operating margin was negative 63 percent during the second quarter and that capital expenditures had increased 213 percent from a year ago to hit $413 million.
Facebook said it had 955 million monthly active users, up from the 901 million users at the end of March.
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