Facebook Profit Tops Estimate; Revenue Falls Shy

(RTTNews) - Social networking giant Facebook, Inc. (FB) said Wednesday after the markets closed that its first quarter profit fell 20% from last year, as higher costs and expenses more than offset a 42% increase in revenue.

However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations, but its quarterly revenue fell shy of analysts' forecast.

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

"This was a strong start to the year," said Mark Zuckerberg, Facebook founder and CEO. "We continue to focus on serving our community and connecting the world."

Facebook shares are currently losing 2.28% in after hours trading after closing the day's regular trading session at $84.63, up $1.01 or 1.21%. The shares trade in a 52-week range of $54.66 to $86.07. Facebook joined the S&P 500 Index on December 20, 2013.

The company's advertising revenue for the first quarter surged 46% year-over-year to $3.32 billion and constituted more than 93% of total revenue.

Facebook said in February that it had more than 2 million active advertisers. The company had revealed in July 2014 that it had 1.5 million active advertisers. The company had crossed the 1 million-advertiser mark in June 2013.

Facebook has now become a big hit with mobile phone users. Facebook's mobile ad revenue represented about 73% of advertising revenue for the first quarter, up from about 69% in the prior quarter and 59% in the prior year quarter.

The company ended the first quarter with 1.44 billion monthly active users, an increase of 13% from a year earlier. Daily active users were 936 million on average for March, up 17% from last year. Mobile monthly active users surged 24% to 1.25 billion at March 31.

For the first quarter ended March 31, 2015, the Menlo Park, California-based company reported net income of $512 million or $0.18 per share, compared to $642 million or $0.25 per share for the year-ago quarter.

Excluding items, adjusted net income for the first quarter was $1.19 billion or $0.42 per share, compared to $926 million or $0.35 per share in the prior year quarter.

On average, 41 analysts polled by Thomson Reuters expected the company to earn $0.40 per share for the first quarter. Analysts' estimates typically exclude special items.

Revenue for the first quarter rose 42% to $3.54 billion from $2.50 billion in the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, first quarter revenue would have increased by 49%. Forty analysts had a consensus revenue estimate of $3.56 billion for the first quarter.

Total costs and expenses for the quarter jumped 83% to $2.61 billion, with R&D expenses more than doubling from a year earlier.