Facebook shares surge 15.5% after results
31 Oct 2013
Facebook shares took a roller-coaster ride yesterday even as profits and revenue increased sharply.
Facebook yesterday shot past Wall Street's forecasts, with the shares soaring to a new all-time high in after-hours trading.
Shares of Facebook surged 15.5 per cent at $56.65, as the company reported third-quarter results after market closed yesterday.
But the stock was down in extended trading after Facebook acknowledged a diminishing use among young teenagers.
According to CFO David Ebersman, who spoke on a conference call, a decrease in the number of daily users, specifically among younger teens had been seen.
Facebook reported net income at $621 million, which excluded certain items, on $2 billion in revenue for the quarter. Facebook's revenue surged 60 per cent from a year ago.
According to Facebook CEO Mark Zuckerberg, 49 per cent of Facebook revenue came from mobile.
According to commentators, the social network's results highlight a swift evolution into delivering mobile advertisement to its News Feed and a booming business.
Mobile advertising revenue stood at $882 million in the quarter, rising sharply from nearly $153 million a year ago.
Facebook last quarter reported that 41 per cent of its ad revenue came from mobile devices used by 819 million of its 1.15 billion users. This quarter it added, 874 million of its 1.19 billion users connected from mobile devices.
Speaking during a conference call, Zuckerburg called Facebook a "mobile company" and pointed out that over half of people were only using Facebook from their phones.
By increasing the number of its mobile users, the company had also been able to sell more mobile ads, a crucial metric that was being widely watched by analysts.
Research firm eMarketer said Facebook had expanded its share of the mobile ad market in the US from just 9 per cent last year to 14.9 per cent this year.
Google however, continued to be the leader, with close to half of all mobile ad spending in the US.
However, Facebook's user growth in the US and Canada appeared to have slowed dramatically.
This was significant as the site earned about $4.19 for each user in the US and Canada, as against only $0.74 for users in high-growth areas such as Asia.
