Facebook seen at turning point as mobile ads surge

Shares of Facebook surged Thursday after a sharp j ump in mobile ad revenues propelled profits and marked what some analysts called a turning point for the social networking giant.

A day after its quarterly earnings report, Facebook shares leapt 29 percent to US $ 34.22 at 1915 GMT, the biggest jump since its public offering in May 2012 as the stock hit its highest level in over a year.

Facebook shares had fallen sharply after the highly anticipated IPO last year and have yet to get back to the offering price of US $ 38. Analysts have spotlighted sluggish mobile ad revenue growth as a major hurdle for the stock.

But the company has aggressively changed its online format to enable it to follow its one billion members onto smartphones or tablets as lifestyles i ncreasingly revolve around accessing the Internet from mobile devices.

Facebook reported net income in the second quarter of US $ 331 million compared with a loss of US $ 157 million in the year-ago period.

Revenue for the quarter that ended June 30 climbed to US $ 1.81 billion, up 53 percent from the same period a year earlier. Facebook said 41 percent of its ad revenues came from mobile, compared with 30 percent in the prior quarter and virtually nothing a year ago.

The gains prompted some leading analysts to employ words like “stunning” to characterize the performance. The most recent reporting period was “an inflection point quarter,” said a note from RBC Capital Markets.

“Facebook over

the last four quarters has addressed and now likely defeated the biggest overhang issue from its IPO days -- mobile monetization,” RBC said.

Still RBC warned investors that the contrast of the second-quarter performance to last year’s was the “easiest” comparison to beat. “So don’t get too carried away,” the analysts said.

Arvind Bhatia at Sterne Agee said the results show that “Facebook’s mobile transition has been highly successful,” and suggested there is more room for growth.