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Facebook Reports Strong Growth in Mobile Advertising Revenue for Q1 (FB)

Social networking giant Facebook Inc. (NASDAQ: FB) reported better-than-expected revenue for the fiscal first quarter on Wednesday, thanks to rising revenue from mobile advertising.

For the quarter, Facebook reported net income of $219 million or 9 cents a share compared to a profit of $205 million or 9 cents a share, in the year-earlier quarter.

Stripping out onetime items, adjusted earnings came at $312 million or 12 cents a share compared to $287 million or 12 cents a share, in the same period of last quarter. Analysts polled by Thomson Reuters were expecting earnings of 13 cents a share.

Revenue in the fiscal first quarter climbed 38% to $1.46 billion from $1.06 billion, in the same quarter of last fiscal, edging past analysts’ consensus estimate for $1.44 billion.

Revenue from advertising, which accounts for bulk of the top line, soared 43% to $1.25 billion with revenue from mobile adverting up 23% from the preceding (fourth) quarter, the company said. In the first quarter, revenue from mobile advertising accounted 30% of the total advertising revenue.

Commenting over strong growth in advertising revenue, Facebook’s COO said in conference call, “Having billions of people checking multiple times a day is a huge opportunity for us. The opportunity for us to connect people to marketers has never been greater.”

While Non-GAAP expense increased 56% in the fiscal first quarter from $895 in the same quarter of last year, non-GAAP operating margin contracted 39% from 46% recorded in the fiscal first quarter of last fiscal. Speaking to analysts and investors during conference call, Facebook Inc’s CFO, David Ebersman said that expenses are expected to rise in coming quarters as the company look to invest in new products, enhance infrastructure and hire more engineers.

Daily and monthly active users’ base also showed reasonable growth in the first quarter. While daily active users for March 2013 climbed 26% to 665 million, from the same period of last year, monthly active users for the same period jumped 23% to 1.11 billion.

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