Facebook quarterly profit and sales exceed Wall Street’s expectations, sending stock soaring in afterhours trading. Facebook shares soared 25% on Thursday, the morning after it posted strong results and said its mobile advertising business continues to gain traction.
Facebook has reported second-quarter revenue of $1.8 billion on Wednesday, exceeding analysts’ expectations of $1.6 billion. Net income rose to $333 million, compared to a massive loss of $157 million a year ago. The stock jumped to more than $33 per share in early hours of trading, a price that has not been reached since back in January. Facebook’s stock has never returned to its original May 2012 IPO price of $38 per share.
One big reason for the new surge is expected to be the number of people using Facebook on a mobile phones or tablets has increased by 51% to 819 million, year to year. Also the company said that the mobile sector continues to make up a greater share of Facebook’s overall advertising structure. Mobile advertising sales have accounted for 41% of Facebook’s total advertising revenue, in the last quarter, that share was just 30%. CEO Mark Zuckerberg said in a conference call with the company’s investors: “When it comes to mobile, I’m very pleased with our results,” At the time of the IPO, business analysts said the company’s lack of mobile revenue was a large downside to the stock and one of the reasons for its sharp drop in price.
Facebook has said its monthly active users have increased to 1.15 billion, that’s a figure up 21% year to year. Company executives are expecting Facebook to continue to grow in both number of users and revenue. “I’m optimistic about growth across Asia and the rest of the world,” said COO Sheryl Sandberg on the conference call. The company’s launch of “Facebook for Every Phone” which allows people in developing countries to access Facebook on their devices, even if they do not have a smartphone. “There’s nothing magical about reaching a billion users,” said Zuckerberg, noting that it was a great initial target, one that was surpassed in the autumn of 2012. “The real goal is to connect everyone in the world.” Currently there are 100 million people using the new app each month.