Facebook Fourth Quarter Earnings Impress Investors
UPDATE: Stock in the social network was surging 12 percent after the closing bell.
Facebook beat the expectations of analysts on Wednesday by reporting a fourth-quarter profit of 31 cents per share on revenue of $2.6 billion, and shares of the social network were climbing 10 percent in after-hours trading.
Wall Street had expected Facebook to earn 27 cents per share on a 50 percent rise in revenue to $2.4 billion. Instead, revenue was up an impressive 63 percent.
As always, the vast majority of revenue, $2.34 billion, came from advertising, but this time around 53 percent of ad revenue came by way of mobile, up from just 23 percent in the same quarter last year.
Net income for the fourth quarter was $523 million, up from $64 million a year ago.
Facebook said its number of daily active users was 757 million during the quarter, up 22 percent from a year earlier, and the number of monthly users was 1.23 billion, up 16 percent. Facebook's Instagram property doubled its user base year-over-year.
During a conference call with analysts on Wednesday, CEO Mark Zuckerberg noted that Facebook recently turned 10 years old. "It's been an amazing journey so far," he said.
Also on the call, an analyst asked about Facebook's appeal to teenagers, but Zuckerberg had no new data to share. In the prior quarter, the company acknowledged "a decrease in daily users, specifically among younger teens," and the revelation caused the stock to sink fast in after-hours trading, though shares recovered in less than a day as investors contemplated strong earnings and revenue growth in that quarter.
During the regular session Wednesday, Facebook shares fell $1.61 to $53.53, but after the closing bell they were up $6.32. Shares of Twitter, also down during regular trading, rose 6 percent after the bell, likely in sympathy with its larger social-network competitor.