Social networking giant Facebook Inc. (NASDAQ: FB) surprised everyone on Tuesday after the company’s third-quarter results showed mobile advertising growth. The positive surprise has sparked a huge rally in FB shares, which are up more than 25% pre-market trading today.
Since Facebook completed its IPO back in May this year, there have increasing concerns over the company’s potential to boost its revenue from mobile advertising. The concerns resulted in FB shares falling nearly 50% from their IPO price of $38. However, Tuesday’s third-quarter results have eased some of those concerns.
Speaking at a conference call with analysts, Facebook’s founder and CEO, Mark Zuckerberg said that he wants to dispel this myth that Facebook cant make money on mobile. Zuckerberg said that this may have seemed true earlier this year because the company had not started trying yet.
After market close on Tuesday, Facebook reported a loss of $59 million, or $0.02 per share for the third quarter ended September 30, 2012. This compares to earnings of $227 million, or $0.10 per share reported for the same period in the previous year. Excluding one-time items, the company reported earnings of $311 million, or $0.12 per share, beating Street estimates of $0.11 per share.
Revenue for the third quarter jumped 32% to $1.26 billion, beating Street estimates of $1.23 billion. Advertising revenue for the quarter was $1.09 billion, representing an increase of 36% over the same period in the previous year. Some 14% of advertising revenue came from mobile advertising.
Zuckerberg said that people who use FB’s mobile products are more engaged, and the company believes it can increase engagement even further as it continues to introduce new products and improve its platform.
FB’s monthly user base grew 26% to 1.01 billion. Zuckerberg said that as proud he is that a billion people use FB each month, he is also really happy that more than 600 million people now share and connect on FB every month using mobile devices.
FB shares were up 27.33% to $24.83 at last check in pre-market trading today.
Recent Comments