Facebook Inc. (Nasdaq: FB), the world's largest social networking platform, is expected to post a profit in its first quarter as a publicly traded company following revenue growth in the April-through-June period.

Earnings per share for Facebook, which reports on Thursday after the market closes, are predicted to be 12 cents, according to Thomson-Reuters analyst consensus. Revenue is expected to reach $1.15 billion, up 8.7 percent from $1.06 billion in the first quarter of 2012. Year-over-year earnings and revenue comparisons are not available for Facebook.

Despite a rocky start in mid-May as a publicly traded company because of Nasdaq glitches during Facebook's initial public offering and accusations that underwriters overvalued the stock, the Menlo Park, Calif.-based company appears on its way to a profitable second quarter. Shares in Facebook, though, have not been insulated by strong ad revenue and have fallen by almost 25 percent since public trading began.

Facebook's revenue growth may result in part from substantial gains in the so-called Cost per Thousand Impressions (CPM) advertising rates, which determines in part the cost of ad space on Facebook. Its global CPM rose 41 percent in the second quarter of 2012, according to TBG Digital's Global Facebook Advertising Report Q2 2012. The biggest gain in CPM came from Germany, where advertising costs shot up 31 percent, while the U.S. CPM gained 25 percent. Canada's CPM rates rose 21 percent, and the CPM rate in the U.K. increased a more modest 7 percent.

The increases are definitely great news for Facebook as they signify that their inventory continues to work better for them, according to TBG Digital.

Revenue at Facebook may also have benefitted by increased Click Through Rates (CTR), which indicate how relevant users find advertising hosted on the website, according to TBG Digital. Facebook's CTR rose 11 percent in the second quarter, an important reversal after it dropped 6 percent during the first quarter. Similarly, the Cost Per Click (CPC), the value of each individual click on a Facebook ad, rose 9 percent in the second quarter, slowing from 23 percent growth in the first quarter.

However, CTR, CPM and CPC growth do not equate directly to earnings growth, according to a Pivotal Research Group report Tuesday. Our past industry experience and ongoing dialog with the industry participants confirms that user metrics and pricing does not dictate growth and will not be directly correlated to growth figures, Pivotal Research cautioned.

Second-quarter earnings for Facebook are likely the result of new advertising initiatives throughout the advertising market, which will lead to incremental spending on Facebook, according to Pivotal Research. Broad growth in advertising spending across media platforms like digital ads, TV and print has helped buoy Facebook revenue in the second quarter.

However, the highly publicized departure of General Motors Company (NYSE: GM) from Facebook advertising in early May possibly indicates that not all advertisers are happy with the Facebook marketplace. GM pulled $10 million a year in Facebook ads, although the move was probably partially motived by cost-cutting at the automaker as much as by dissatisfaction with Facebook.

Yet heightened competition with competitors like Google Inc. (Nasdaq: GOOG) and Microsoft Corporation (Nasdaq: MSFT) may have depressed Facebook revenue and earnings during the second quarter, according to Pivotal Research. The competition may have also heightened investment requirements for Facebook as it seeks to expand data centers and online video capabilities.

We project that 2012 annual operating and net margins will be adversely affected by significant spending related to innovation and infrastructure, a recent Standard & Poor's report on Facebook confirmed.

Facebook's tax rate is also expected to have risen in the second quarter following its IPO. While Facebook had cash reserves of at least $10 billion after the IPO, much of that capital is expected to be expended on geographic expansion, mobile technology and mergers and acquisitions.

Facebook CEO Mark Zuckerberg coordinated the $1 billion acquisition of photo sharing service Instagram in April.

Facebook Inc. (Nasdaq: FB) shares fell 11 cents to $28.34.

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