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Facebook’s Q4 Results Beat Street Estimates, Shares Tumble Amid Concerns over Rising Expenses (FB)

Social network Facebook Inc. (NASDAQ: FB) after-market close on Wednesday reported better-than-expected fourth-quarter results. However, shares tumbled in pre-market trading as investors were spooked by a sharp rise in expenses compared to the same period in the previous year.

Ever since Facebook completed its IPO in May last year, there had been growing concern over how the company will cope as more people switch to mobile. This sparked a huge sell-off in FB shares following the IPO. However, shares of the social networking giant rebounded in October last year after the company’s third-quarter results showed mobile advertising revenue accounted for 14% of the total advertising revenue.

In the fourth quarter, mobile advertising revenue represented nearly 23% of advertising revenue. This is an encouraging trend, given the shift to mobile computing. However, the company also saw an 82% increase in its costs and expenses for the quarter.

For the fourth quarter of 2012, Facebook reported net income of $64 million, or $0.03 per share, compared to $302 million, or $0.14 per share reported for the same period in the previous year. Excluding one-time items, the company reported net income of $426 million, or $0.17 per share, compared to $360 million, or $0.15 per share reported for the same period in the previous year. Adjusted earnings for the quarter beat consensus forecast of $0.15 per share. Revenue for the quarter rose 40% to $1.585 billion, up 40% over the same period in the previous year. Advertising accounted for 84% of the total revenue in the fourth quarter.

The company’s monthly active users (MAUs) were 1.06 billion as of December 31, 2012. Daily active users (DAUs) were 618 million on average for December 2012. Mobile MAUs, as of December 31, 2012, stood at 680 million.

Mark Zuckerberg, founder and CEO of Facebook, said that the company enters 2013 with good momentum and will continue to invest to achieve its mission and become a stronger, more valuable company.

FB shares were down nearly 5% in pre-market trading today.

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