Post date: Jan 30, 2014 12:39:19 AM
Facebook posts better-than-expected 4th-quarter earnings.
UNITED STATES (FACEBOOK VNR) - Facebook Inc's <FB.O> fourth-quarter revenue jumped 63 percent, beating Wall Street targets, as the Internet company's mobile ad sales continued to accelerate.
Shares of Facebook were up 7 percent at $57.36 (USD) in after-hours trading on Wednesday (January 29).
The world's largest social networking company said that revenue from mobile ads represented 53 percent of its total advertising revenue in the last three months of the year, or $1.24 billion, versus the 49 percent proportion that mobile ads represented in the third quarter.Facebook said it now has 1.23 billion monthly users, with 945 million accessing the service on a smartphone or tablet.
Rick Summer, an analyst from Morningstar, said the public's interest in engaging in social media is not waning.
"I think there still is a lot of truth to the fact that people want to, whether it's in a very active way, communicate and interact with their social network, or in a very passive way, to lurk and to stalk, would be the more negative way to look at it. Regardless there's this pull mechanism that continues to have people go out and use the application. We really think that has a great deal of staying power. Now that obviously cuts both ways. We've seen in other social networks or other networks of any kind, when people tend to leave networks that really has a self-reinforcing negative effect as well, so that obviously is a cautionary tale," Summer told Reuters.
"Thinking about Facebook as a business and how much advertising ultimately can you throw at the users, I think we certainly have been surprised at how they've been able to accelerate and really push the gas pedal and create compelling advertising products. So we've seen great acceleration, for example, we've seen 25 percent advertising growth on a per user basis, quarter over quarter. That's tremendous. That's driven both by pricing and additional advertising product," he added.
Overall revenue in the fourth quarter rose to $2.585 billion, compared with $1.585 billion in the year-ago period and above the $2.33 billion expected by analysts polled by Thomson Reuters I/B/E/S.
Facebook reported net income of $523 million, or 20 cents a share, versus $64 million or 3 cents a share in the year-ago period. Excluding certain items, Facebook said it earned 31 cents a share.