Facebook’s revenue tops estimates as mobile fuels sales growth

Facebook Inc. delivered another quarter of record revenue that topped estimates as it sells more ads via videos, mobile devices and the Instagram photo-sharing service, sending its shares up more than 8%.

Fourth-quarter sales rose to $5.84 billion, compared with the $5.37 billion average analyst projection, according to data compiled by Bloomberg. The growth was fueled by more people joining the world's biggest social network, with more than 1.59 billion users logged on every month, especially on smartphones and tablets. About 80% of revenue came from mobile devices.

"It really is a continuation of the mobile story," said chief financial officer David Wehner. "Mobile is where people spent this past holiday season and mobile is where Facebook excels." Marketers are flocking to Facebook and its knack for getting well-targeted ads in front of consumers. The same technology is now being deployed across the company's properties, especially Instagram, which just marked its first full quarter of ad sales across international markets. That's giving chief executive officer Mark Zuckerberg more leeway to step up spending on newer initiatives including virtual reality and artificial intelligence.

"If you're an advertiser and you want to reach mass scale, you only have two options: Facebook and Google," said James Cakmak, an analyst at Monness Crespi Hardt and Co. "Facebook remains the fastest-growing platform for advertiser spending, and as they open up new channels for users, that won't change."

Fourth-quarter net income more than doubled to $1.56 billion, or 54 cents a share, from 701 million, or 25 cents, a year earlier. Profit excluding some items was 79 cents a share, beating analysts' average prediction for 68 cents. Facebook shares jumped as much as 6.4% in extended trading. The stock, which climbed 34% last year, hasn't been immune to this month's global equity selloff, and is down 9.7% in 2016.

EMarketer is predicting that Facebook will capture one in every five mobileadvertising dollars in the US in 2016, and that Instagram will make up 20% of Facebook's revenue from mobile devices. Facebook has also been pushing to get more revenue from international marketsespecially in Asia, where executives spent more time in recent months, and where Instagram now advertises. Revenue from Asia jumped 19% from the prior quarter to $846 million, accelerating from an increase of 14% in the third quarter.

Facebook is pushing forward with plans to generate income from its newer projects. Oculus Rift, the virtual reality headset, started its first sales to consumers earlier this month. Internet.org, the free Web access initiative for emerging markets, has a widely used Free Basics app, which has already sparked protests in India for being too Facebook-centric.

Apart from users of its main social network, Facebook now has several properties that are poised to top 1 billion users, including WhatsApp and Messenger. Instagram has more than 400 million users. "It's another quarter of sequential acceleration," Cakmak said. "And this is just off the core, before windfalls from new product areas."