Facebook shares soar after crushing earnings — again
Social network sees revenue growth of 59%, sending stock up 5% in extended trading
Facebook reaffirmed its status as one of technology’s biggest success stories Wednesday, sending its stock to a record high after delivering the fastest rate of revenue growth in two years, a whopping 59%.
The social-media giant has topped Wall Street estimates all but once since its May 2012 initial public offering. The secret to its nearly unblemished earnings streak: Scorching growth in mobile advertising fueled by video spots and ads that target the growing number of people flocking to Facebook and Instagram.
“They knocked it out of the park again,” said Jan Dawson, chief analyst with Jackdaw Research.
Facebook served up the good news with a side of caution. Facebook’s finance chief David Wehner warned analysts the Silicon Valley company would not keep up this torrid pace in the second half of the year, when it will face tough year-over-year compari- sons. That’s because Facebook increased the number of ads users saw in their News Feed in the latter half of 2015.
His warning didn’t spook Wall Street, at least not much. Shares rose 5% in extended trading. It ended Wednesday’s regular session up 1.8% at $123.34.
“We had another great quarter,” Facebook CEO Mark Zuckerberg told analysts.
You can say that again. Facebook generated $6.44 billion in revenue in the quarter, easily beating Wall Street estimates. Analysts expected Facebook to generate $6 billion in secondquarter revenue, according to S&P Global Market Intelligence. Mobile represented 84% of $6.24 billion in advertising revenue.
Advertisers are flocking to Facebook and its photo-sharing app Instagram. As of June 30, Facebook says it had 1.71 billion monthly active users, up 15% year over year. Some 1.13 billion users logged into Facebook at least once a day in the same period, up 17%. The bottom line: two thirds of Facebook users are on the service every day. And, the number of users who accessed the service on a mobile device rose above 1 billion for the first time.
Profit is growing, too. In the second quarter, Facebook reported net income of $2.06 billion, or 71 cents a share, compared with $719 million or 25 cents a share a year ago. Facebook posted earnings per share, excluding certain expenses, of 97 cents. Wall Street expected Facebook to report earnings per share, excluding certain expenses, of 82 cents, compared with 50 cents a year earlier.