Finances

Last week, Facebook, Inc. (FB) released its first earnings report since becoming a publicly traded company. The report covered the second quarter of the company's fiscal year.

For the quarter, Facebook reported revenue of $1.18 billion, up 32% from $895 million in the same period last year. The company also saw marketing and sales expenses quadruple and margins fall from 53% to 43%.

For the quarter, the company reported a loss of $157 million. The losses were attributed to one-time compensation expenses related to the company's initial public offering on May 18.

"Our goal is to help every person stay connected and every product they use be a great social experience," said Mark Zuckerberg, Facebook founder and Chief Executive Officer. "That's why we're so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends."

Shares of Facebook, Inc. (FB) closed the week at $23.71.

Build-A-Bear Reports Flat Earnings

Build-A-Bear Workshop, Inc. (BBW) reported its latest earnings last week. The company, which bills itself as "an interactive entertainment retailer," allows children to design and watch the assembly of their own teddy bears and other stuffed animals.

For the second quarter, the company reported net retail sales of $79 million, down 1.8% from $80.4 million in the same period last year. The decline was attributed to the shift of the Easter holiday from the second quarter last year to the first quarter this year.

The company reported a net pre-tax loss of $8.3 million for the quarter. This marks a slight improvement over the same period last year in which the company reported losses of $10.7 million.

Commenting on the company's earnings report, Maxine Clark, Build-A-Bear Workshop's Chief Executive Bear, stated, "Our first six months results show our progress toward our goals with positive comparable store sales in North America, a sequential improvement in quarterly trends in Europe and strong growth in our e-commerce sales. The execution of our key strategies, including disciplined expense control, has driven a solid improvement in our operating performance in the first half of 2012. While the economic environment continues to be challenging, particularly in Europe, we believe the key components of our strategy are on track to post further improvement in sales productivity and profitability."

Build-A-Bear Workshop, Inc. (BBW) shares closed the week at $4.58.

Callaway's Earnings Par for the Course

Callaway Golf Company (ELY) announced its second-quarter earnings last week. The earnings met preliminary estimates.

For the quarter, Callaway reported net sales of $281 million. This is an increase of 2.5% from the same period last year in which the company reported revenue of $271 million.

The company also reported net income of $10 million for the quarter. This is a dramatic improvement from the same period last year in which the company lost $10 million.

"We are pleased that sales and earnings increased during the first half of 2012 compared to the same period in 2011," commented Callaway's President and Chief Executive Officer, Chip Brewer. "The pace of improvement, however, is slower than anticipated and our market shares have not met our expectations, resulting in higher than expected retail inventory levels at this time of year."

Callaway Golf Company (ELY) closed the week at $5.55 per share.

The Dow started the week at 12,823 and closed at 13,075. The S&P 500 started the week at 1,363 and ended at 1,385. The NASDAQ started the week at 2,925 and finished at 2,958.

At the end of last week, Spanish and Italian bonds advanced. The improvement was the result of speculation that other EU nations may sanction their own country's purchase of sovereign debt.

The yield on 10-year Spanish debt fell to 6.74%, down 18 basis points. This is down substantially from 7.75% on July 25. The July 25 yield was a record high since the EU was created.

Likewise, Italy's yield for 10-year debt also fell. For the first time since July 20, Italy's yield fell below 6.0% to 5.96%.

The lower yields came on the heels of European Central Bank President, Mario Draghi, stating that action would be taken to rein in borrowing costs. "Draghi will have to follow up on his statement from yesterday and the market thinks that will be with bond buying," said Anders Moeller Lumholtz, an analyst at Danske Bank A/S. Lumholtz stated that the expectation was pushing down Spanish and Italian bond yields.

The 10-year Treasury note yield finished the week at 1.56% while the 30-year Treasury note yield finished the week at 2.64%.

On July 26, 2012, Freddie Mac released the results of its most recent Primary Mortgage Market Survey (PMMS). According to the PMMS, fixed rate mortgages (FRM) continue to reach new record lows.

The 30-year FRM averaged 3.49% over the week. This is down from 3.53% during the previous week and down from 4.55% a year ago at this time.

The 15-year FRM averaged a record low 2.80% over the week. This is down from an average of 2.83% the week before and 3.66% a year ago.

Frank Nothaft, Freddie Mac's Vice President and Chief Economist, commented on the PMMS. Nothaft stated, "Market concerns over the strength of the economic recovery brought long-term Treasury yields to new lows this week allowing fixed mortgage rates to reach record levels. The Conference Board Leading Economic Index showed the largest monthly decline in June since September 2011. Existing home sales fell to 4.36 million homes (annualized) in June and represented the slowest pace since October 2011. Similarly, new home sales fell in June to their lowest level since January of this year."

The money market fund finished this week at 0.50%. The 1-year CD finished at 0.70%.