Facebook posts $59M loss on higher revenue; shares jump
ASSOCIATED PRESS October 23, 2012 3:34PM
Updated: November 25, 2012 11:43AM
Facebook’s third-quarter results inched past Wall Street’s expectations, offering evidence that the company is making inroads in mobile advertising — a longtime concern among investors.
Tuesday’s financial results, Facebook’s second as a public company, sent its stock sharply higher in after-hours trading. The stock jumped $1.90, or 9.7 percent, to $21.40 after the announcement. Facebook had closed up 18 cents at $19.50 in regular trading on a day that saw the Dow Jones Industrial Average drop 243 points, or 1.8 percent.
The world’s biggest social media company posted a loss of $59 million, or 2 cents per share, in the July-September period. That’s down from earnings of $227 million, or 10 cents per share a year ago, when Facebook was still privately held.
Excluding special items, mainly related stock compensation expenses, Facebook Inc. earned $311 million, or 12 cents per share, in the latest quarter, a penny better than what analysts were expecting.
Revenue rose 32 percent to $1.26 billion from $954 million.
Analysts had expected earnings of 11 cents per share on revenue of $1.23 billion, according to FactSet.
Facebook’s monthly user base grew 26 percent from a year earlier, to 1.01 billion. Some 60 percent of users access Facebook using a mobile device, the company said.
“People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform,” said CEO Mark Zuckerberg in a statement. “At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company.”
Advertising revenue was $1.09 billion, up 36 percent from a year earlier. It represented about 86 percent of Facebook’s total revenue.
Revenue from payments and other fees climbed 13 percent to $176 million. This figure includes Facebook’s cut from the virtual items people buy for games they pay on the site.
Facebook said it generated 14 percent of its advertising revenue from mobile ads during the quarter. That amounts to about $152.6 million. This was the first time the company has disclosed a mobile ad revenue figure —a closely watched metric because so many more people use mobile gadgets to access Facebook. Facebook faces a challenge with mobile advertising: The company must try to show users ads on smaller, mobile screens without annoying or overwhelming them.
“I want to dispel this myth that Facebook can’t make money on mobile,” said CEO Mark Zuckerberg in a conference call with analysts. “This may (have seemed) true earlier this year because we hadn’t started trying yet but after just six months of ramping up our mobile ads business we’re already at a point where 14 percent of our ad revenue this quarter is for mobile.”
Chief Financial Officer David Ebersman said Facebook had a “solid performance” in the third quarter.
Facebook did not provide guidance for the current quarter or beyond, a practice it has maintained since its first earnings report as a public company in late July.