Facebook Results Trounce Estimates

(RTTNews) - Social networking giant Facebook, Inc. (FB) said Wednesday after the markets closed that it swung to a second quarter profit, helped by higher revenue and lower costs and expenses.

The company's quarterly earnings per share, excluding items, also breezed past Wall Street expectations as did its quarterly revenue.

This marks the company's fifth quarterly results since going public through a much hyped IPO in May last year.

"We've made good progress growing our community, deepening engagement and delivering strong financial results, especially on mobile," said Mark Zuckerberg, Facebook founder and CEO.

Facebook shares are currently gaining 19.35% in after hours trading after closing the day's regular trading session at $26.51, up 38 cents or 1.45%. As of Wednesday's close, the shares were trading 30.2% lower than the company's IPO price of $38.00.

The company's advertising revenue for the second quarter surged 61% year-over-year to $1.60 billion and constituted 88% 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, 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 41% of advertising revenue for the second quarter, up from about 30% of advertising revenue in the previous quarter.

At the end of the second quarter, the company had 1.15 billion of monthly active users, an increase of 21% from a year earlier. Daily active users were 699 million on average for June, up 27% from last year. Mobile monthly active users surged 51% to 819 million at June 30.

For the second quarter ended June 30, 2013, Menlo Park, California-based Facebook reported net income of $333 million or $0.13 per share, compared to a net loss of $157 million or $0.08 per share for the year-ago quarter.

Excluding items, adjusted net income for the second quarter was $488 million or $0.19 per share, compared to $295 million or $0.12 per share in the prior year quarter.

On average, 37 analysts polled by Thomson Reuters expected the company to earn $0.14 per share for the second quarter. Analysts' estimates typically exclude special items.

Revenue for the second quarter rose 53% to $1.81 billion from $1.18 billion in the same quarter last year. Thirty-four analysts had a consensus revenue estimate of $1.62 billion for the second quarter.

Adjusted operating margin for the quarter improved to 44% from 43% a year ago.