Facebook’s mobile push exceeding expectations
SANFRANCISCO— Facebook Inc. reported sales and profit that exceeded estimates as the operator of the world’s most popular social-networking service lured more advertisers to its mobile services, sending shares up as much as 19 per cent.
Second-quarter revenue rose 53 per cent to $1.81 billion US, the company said in a statement Wednesday. Second-quarter profit excluding certain items was $488 million US, or 19 cents a share. Analysts had projected profit of 14 cents on sales of $1.62 billion US on average, according to data compiled by Bloomberg.
Mobile made up 41 per cent of advertising dollars in the second quarter, up from 30 per cent in the previous period. CEO Mark Zuckerberg’s push to make advertising for smartphones and tablets a priority is starting to pay off, as users increasingly access Facebook on mobile devices.
“Finally the blowout quarter that Facebook bulls have been waiting for,” said Paul Sweeney, an analyst at Bloomberg Industries.
“Among many impressive data points, I think investors will focus on the percentage of revenue from mobile of 41 per cent, which was well above consensus.”
Shares of Facebook, based in Menlo Park, California, climbed as much as 19 per cent in extended trading. The stock advanced 1.5 per cent to $26.51 US at the close in New York, leaving it down 30 per cent since an initial public offering last year.
Facebook is projected to take 13 per cent of the global mobile-advertising market this year, up from 5.4 per cent last year according to E Marketer Inc. Still, the company remains a distant No. 2 to Google Inc., which is expected to grab 56 per cent of the market in 2013.
“This quarter represents a strong validation that we’re effectively navigating the shift to mobile,” said David Ebersman, Facebook’s chief financial officer.
“All the investments we’ve been making in the business have been paying off.”
Net income attributable to shareholders was $333 million US, up from a loss a year earlier.
Facebook has stepped up efforts with its mobile services, including updates to its smartphone applications and a new video feature for photo-sharing service Instagram.