Facebook Profit Jumps On Strong Mobile Ad Growth

(RTTNews) - Social networking giant Facebook, Inc. (FB) said Wednesday after the markets closed that its fourth quarter profit rose sharply from last year, as revenue surged 63% amid strong growth in mobile advertising.

The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue.

This marks the company's seventh quarterly results since going public through a much hyped IPO in May 2012.

"It was a great end to the year for Facebook," said Mark Zuckerberg, Facebook founder and CEO. "We're looking forward to our next decade and to helping connect the rest of the world."

Facebook shares are currently gaining 8.57% in after hours trading after closing the day's regular trading session at $53.53, down $1.61 or 2.92%. The shares trade in a 52-week range of $22.67 to $59.31.

Facebook joined the S&P 500 Index on December 20, 2013.

The company's advertising revenue for the fourth quarter surged 76% year-over-year to $2.34 billion and constituted more than 90% of total revenue.

Facebook has now become a big hit with mobile phone users. In December 2012, the company launched Facebook for Android 2.0 and opened Facebook Messenger to anyone with a telephone number. In April 2013, Facebook unveiled a new Android app called "Home" that brings Facebook contents right to the smartphone homepage, as the social networking giant implemented new features to increase its share in the mobile ad market.

Facebook's mobile ad revenue represented about 53% of advertising revenue for the fourth quarter, up from about 49% in the prior quarter, and a massive jump from 23% in the prior year quarter.

The company ended the fourth quarter and 2013 with 1.23 billion monthly active users, an increase of 16% from a year earlier. Daily active users were 757 million on average for December, up 49% from last year. Mobile monthly active users surged 39% to 945 million at December 31, 2013.

For the fourth quarter ended December 31, 2013, Menlo Park, California-based Facebook reported net income of $523 million or $0.20 per share, compared to $64 million or $0.03 per share for the year-ago quarter.

Excluding share-based compensation and related payroll tax expenses, adjusted net income for the fourth quarter was $780 million or $0.31 per share, compared to $426 million or $0.17 per share in the prior year quarter.

On average, 40 analysts polled by Thomson Reuters expected the company to earn $0.27 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Revenue for the fourth quarter rose 63% to $2.59 billion from $1.59 billion in the same quarter last year. Thirty-eight analysts had a consensus revenue estimate of $2.33 billion for the fourth quarter.

Operating margin for the fourth quarter improved to 44% from 33% a year earlier, while adjusted operating margin increased to 56% from 46% last year.