Facebook profit, revenue smash estimates as mobile ad sales soar

facebookUNITED STATES:Facebook Inc crushed quarterly profit and revenue estimates on Wednesday as the social media giant’s push into video ads helped bolster its fast-growing mobile ad business.

The company’s shares were up 1.4 % at US$168 (RM720) after the bell. Through Wednesday’s close, the stock had climbed nearly 44% this year.

Facebook said about 2.01 billion people were using its service monthly as of June 30, up 17% from a year earlier.

The social media giant said in June it had surpassed the 2-billion user mark.

Mobile ad revenue accounted for 87% of the company’s total advertising revenue of US$9.16 billion (RM39.2 billion) in the latest quarter, up from 84% a year earlier.

Analysts on average had expected total ad revenue of US$9.02 billion (RM38.6 billion), according to data and analytics firm FactSet.

Facebook is expected to generate US$36.29 billion (RM155.5 billion) in net digital ad revenue this year, a 35% jump from 2016, according to research firm eMarketer.

Net income attributable to Facebook shareholders rose to US$3.89 billion (RM166.7 billion), or US$1.32 (RM5.66) per share, in the second quarter ended June 30 from US$2.28 billion (RM9.77 billion), or 78 cents per share, a year earlier.

Total revenue rose 44.8% to $9.32 billion (RM39.9 billion).

Analysts on average had expected earnings of US$1.13 (RM4.84) per share and revenue of US$9.20 billion (RM39.4 billion), according to Thomson Reuters.

In the first quarter, Facebook changed the method it reports earnings, focusing on Generally Accepted Accounting Principles (GAAP) earnings instead of non-GAAP.