Tags: Facebook | Results | Expectations | Shares

Facebook Results Outstrip Expectations; Shares Surge

Wednesday, 24 Jul 2013 04:30 PM

Facebook Inc. reported sales and profit that exceeded analysts’ estimates as the operator of the world’s most popular social-networking service attracted more marketers to its mobile-advertising services.

Second-quarter revenue rose 53 percent to $1.81 billion, the company said in a statement Wednesday. Second-quarter profit excluding certain items was $488 million, or 19 cents a share. Analysts had projected profit of 14 cents on sales of $1.62 billion on average, according to data compiled by Bloomberg.

Mobile made up 41 percent of advertising dollars in the second quarter, up from 30 percent in the first quarter. Chief Executive Officer Mark Zuckerberg’s push to make advertising for smartphones and tablets a priority is starting to pay off, as users increasingly access Facebook on mobile devices, according to Martin Pyykkonen, an analyst at Wedge Partners in Greenwood Village, Colorado.

“They’re getting better on their execution in the business of selling advertising,” Pyykkonen said. “There’s a long way to go, but things are going in the right direction.”

Facebook is projected to take 13 percent of the global mobile-advertising market this year, up from 5.4 percent last year according to EMarketer Inc. Still, the company remains a distant No. 2 to Google Inc., which is expected to grab 56 percent of the market in 2013.

Shares of Facebook, based in Menlo Park, California, climbed as much as 17 percent in extended trading. The stock advanced 1.5 percent to $26.51 at the close in New York, leaving it down 30 percent since an initial public offering last year.

Mobile Push

Net income attributable to shareholders was $333 million from a loss a year earlier.

Facebook has stepped up efforts with its mobile services, including updates to its smartphone applications and a new video feature for photo-sharing service Instagram. Investors’ concern that Facebook’s wasn’t shifting its focus fast enough toward wireless devices weighed on the shares in the four months following its market debut.

The number of mobile users expanded 51 percent to 819 million during the quarter. The total number of Facebook members was 1.15 billion, compared with 1.11 billion in the earlier period.

Facebook is also making improvements to its advertising tools for marketers. The company said last month it intends to cut its 27 ad units by more than half, making the promotion- buying process more simple and efficient.

The social-networking provider has been wooing more large advertisers. In April, Facebook won back General Motors Co. as a customer almost a year after the automaker said it was pulling ads off the service.

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Facebook Inc. reported sales and profit that exceeded analysts' estimates as the operator of the world's most popular social-networking service attracted more marketers to its mobile-advertising services.

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