SIZZLIN’ ZUCK
Facebook blows past forecasts in stellar Q2
Facebook, whose soaring value crept close to $500 billion late Wednesday, showed no signs in the second quarter of slowing user growth or in its ability to hoover up advertising revenue.
Mark Zuckerberg’s social network reported monthly active users increased to 2.01 billion — up 17 percent from the year-earlier period — or roughly 27 percent of the world’s population.
In addition to growing its user base, Facebook also beat Wall Street estimates for both revenue and earnings per share.
The results sent the stock to a high of $173 in afterhours trading — up 5 percent from its closing price — scoring a record market cap of about $496 billion.
Facebook’s revenue of $9.32 billion — an increase of 45 percent from the yearearlier quarter — not only put fears of a slowdown to rest but also topped analyst expectations of $9.2 billion.
Facebook’s EPS of $1.32 — up 69 percent from the year-earlier period — came in 17 percent greater than expected.
The stock might have moved even higher in extended trading if investors weren’t trained to expect overperformance.
In the past two years, the social media powerhouse’s numbers have eclipsed expectations by 3 percent in revenue and by 13 percent in earnings per share, according to Merrill Lynch analyst Justin Post.
Shares have risen 44 percent year to date, topping the 40 percent gain posted by red-hot Amazon.
The increase has moved Facebook into the Top 5 of US public companies.
When Zuckerberg’s company passes the $500 billion mark in market cap, it will join Apple, Google, Microsoft and Amazon as the only five companies with that distinction.
The Menlo Park, Calif., company was founded in 2004 — a decade after Amazon and six years after Google — and didn’t go public until 2012.
Zuckerberg, a 33-year-old Harvard dropout, has been the biggest beneficiary of Facebook’s growth.
Forbes has the cofounder and chief executive’s wealth pegged at $69 billion — up from $45 billion a year ago — almost all of which is attributable to his Facebook holdings.
Advertising drove the company to record heights during the quarter, soaring 47 percent to $9.2 billion. Of that amount, 87 percent came from mobile advertising, a sweet spot because advertisers increasingly are chasing consumers on their mobile devices.
The company said its effective tax rate in the period was 13 percent.
What’s more, employment is soaring, up 43 percent from the year-earlier period to 20,658, as the company pursues new opportunities such as AI, or artificial intelligence.
Zuckerberg, an AI opti- mist, has been clashing with fellow tech mogul Elon Musk about whether mankind can effectively constrain robots as they obtain ever-increasing intelligence.
Facebook’s CEO stayed true to his optimistic view on Wednesday, saying AI is already being put to use “to keep terrorists off of Facebook” and to help marketers target consumers “better than we can manually.”