Facebook Q4 Profit Rises - Update

(RTTNews) - Facebook Inc. (FB), Wednesday reported a fourth-quarter profit that surged from a year ago, as the social networking giant's ad revenues continues soar.

Menlo Park, California-based Facebook's fourth-quarter profit surged to $4.27 billion or $1.44 per share from $3.57 billion or $1.21 per share last year.

The company said its fourth quarter results were impacted by the US tax reforms which increased its provision for income taxes by $2.27 billion, impacting earnings by $0.77 per share for both the fourth quarter and full year.

On average, 35 analysts polled by Thomson Reuters estimated earnings of $1.95 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter surged 47 percent to $12.97 billion from $8.81 billion last year. Analysts had a consensus revenue estimate of $12.55 billion for the quarter.

Daily active users rose 14 percent to 1.40 billion on average for December, while monthly active users increased 14 percent to 2.13 billion.

Mark Zuckerberg, Facebook founder and CEO said, "Already last quarter, we made changes to show fewer viral videos to make sure people's time is well spent. In total, we made changes that reduced time spent on Facebook by roughly 50 million hours every day. By focusing on meaningful connections, our community and business will be stronger over the long term."

The social media giant had made changes to its content-recommendation software after it received widespread criticism for spreading false information, racist and other violent content.

Revenues of Facebook, the world's most popular social networking site, continues to surge every quarter as companies and other firms continue to spend heavily to advertise on the social network.

Mobile advertising revenues continue to be dominant contributor to ad revenues as it represented 89 percent of advertising revenue for the quarter, up from 84 percent last year. Total advertising revenues surged 48 percent to $12.78 billion.

Total costs and expenses increased 32 percent to $5.62 billion, as Facebook continues to spend heavily on research and development as well as on marketing.

FB closed Wednesday's trading at $186.89, down $0.23 or 0.12%, on the Nasdaq. The stock further slipped $4.39 or 2.35% in the after-hours trading.