Facebook shares hit record high,
‘We had a good quarter,’ CEO says as profits rise 41%
SAN FRANCISCO Facebook re-ported third-quarter revenue rose 41% to $4.5 billion on the strength of its mobile advertising, pushing shares to an all-time high.
Facebook was expected to post third-quarter revenue of $4.37 billion, up 36% from $3.2 billion a year ago.
“That’s really robust growth,” said S&P Capital IQ analyst Scott Kessler. Its strength is getting investors more interested, he said.
Mobile advertising revenue comprised 78% of total ad revenue in the third quarter, up from 66% a year ago, showing the progress Facebook is making in its mission to convince advertisers that it has the best ad products to target consumers on mobile devices.
The company that runs the world’s largest social network says Facebook (FB) now has 8 bil- lion daily video views. About 75% of videos are watched on mobile devices, making the giant social network a fearsome competitor for Google’s YouTube and a possible contender for television ad dollars.
Facebook also has a trio of mobile apps that could eventually attract ad dollars: Messenger, WhatsApp and Instagram.
Investors are keenly interested in the revenue potential of these apps. But Facebook’s chief financial officer David Wehner says Facebook is focused on building “great products” and “driving user growth” but has no immediate plans to make money from the apps. “The business side isn’t the main focus right now,” he said during a conference call with analysts.
The Menlo Park, Calif., company does not break out revenue for Instagram and declined to provide specifics. Research firm eMarketer estimates Instagram’s worldwide ad revenue will reach $600 million this year, $1.48 billion in 2016 and $2.81 billion in 2017. Instagram will account for 5% of Facebook’s worldwide ad revenue this year and 14% in 2017, eMarketer forecasts.
Facebook’s chief operating officer Sheryl Sandberg said Facebook and Instagram now account for one in five minutes spent on mobile in the USA.
“We had a good quarter and got a lot done,” Mark Zuckerberg, Facebook’s founder and CEO, said in a written statement.
Excluding certain expenses, Facebook reported earning per share of 57 cents, up 33% from 43 cents a year ago. Facebook was expected to post earnings per share of 52 cents, up 21% from 43 cents a year ago.
Shares jumped 4% in afterhours trading to $107.75, hitting a record.