Facebook (NASDAQ:FB) reported income above expectations, thanks to mobile advertising business that began to take momentum, amid increasing number of users visiting the social network every day, according to Reuters. Results from the second quarter of 2013 were received with exuberance by investors.
Facebook shares virtually exploded on Wall Street after the publication of results, rising by 29.61 percent to $34.36 in the extended session after the closing bell. During the trading session, the shares rose by only 1.45% to $26.51.
The number 1 social network 1 in the world reported that 700 million of the 1.15 billion users visit Facebook daily, up from 665 million at the end of the first quarter.
The increase occurred despite concerns that Facebook traffic could suffer due to competition with many other new mobile services popular among young people, such as Snapchat or WhatsApp.
“We believe Facebook is in the early innings of revolutionizing the $600 billion worldwide advertising market, particularly the sub-segment of online advertising,” said analyst Arvind Bhatia from Sterne Agee. He considers Facebook a “buy”, adding: “Our estimates would be achievable if Facebook increases its share of online advertising by only 300 basis points from 5 percent in 2011 to close to 8 percent by 2016.”
Facebook has managed to increase its revenues by 53 percent to $1.813 billion in the second quarter, well above the $1.618 billion average estimate of analysts polled by Thomson Reuters. A year ago, Facebook had reported a quarterly revenue of $1.184 billion.
The best news is that revenues from the mobile advertising have come to represent 41 percent of total revenue from advertising, an impressive growth of 30 percent from three months ago.
The world’s largest social network said it made a net profit of $333 million, or 13 cents per share, compared with $157 million or 8 cents per share a year ago. Excluding compensation in shares and adjustments on the wages and tax charges, Facebook said it earned 19 cents per share.
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