Facebook has surprised Wall Street with stronger-than-expected earnings for the second quarter on a sharp rise in mobile ad revenues, sparking a surge in its share price in after-hours trade.
“The work we’ve done to make mobile the best Facebook experience is showing good results and provides us with a solid foundation for the future,” said Facebook chief Mark Zuckerberg as the social network reported a profit of $US331 million ($A358 million) for shareholders.
Revenue for the quarter that ended June 30 climbed to $US1.81 billion, up 53 per cent from the same period a year earlier.
The profit of $US331 million compared with a loss of $US157 million the California-based company posted in the same quarter last year.
Facebook said 41 per cent of its ad revenues came from mobile, compared with 30 per cent in the prior quarter and virtually nothing a year ago.
“We’ve made good progress growing our community, deepening engagement and delivering strong financial results, especially on mobile,” Zuckerberg said.
Facebook shares leapt more than 19 per cent to $US31.75 after the earnings figures were released.
Facebook is expected to increase its share of the $US116.82 billion global digital ad market to 5.04 per cent this year, according to industry tracker eMarketer.
The leading social network’s portion of the mobile ad market will more than triple to more than $US2 billion this year, eMarketer forecast.
Forrester analyst Nate Elliott expressed fear that Facebook may be “pulling the mobile ad lever too hard” and be hitting users with too many marketing messages in an effort to prove itself.
Facebook’s stock took a beating after the company’s initial public offering, largely because of criticism that the social network wasn’t making money from mobile users.Posted on