Facebook Posts Loss, But Emphasizes Mobile Growth
By JOHN LETZING And BEN FOX RUBIN
Facebook Inc. FB +0.93% posted a quarterly loss Tuesday as costs mounted, but the social site also issued some encouraging data on its progress in making money from mobile phone use.
Shares of Facebook rose as much as 10% in after-hours trading as the company's earnings and revenue were slightly ahead of Wall Street's expectations. As of the close, the stock had fallen almost 50% from its initial public offering in May.
Overall, Facebook posted 32% revenue growth in the quarter compared with the period last year. That growth is flat with the prior period—its slowest rate in at least a year—and down from the 45% growth posted in the first quarter of this year.
But many investors appear to be focusing on where Facebook's ad revenue is coming from: The company said that 14% of its advertising sales in the period came from mobile devices. That percentage amounts to roughly $150 million.
Facebook has been dogged by criticism of its ability to make revenue from the growing use of its site on mobile phones.
In an interview, Facebook Chief Operating Officer Sheryl Sandberg noted that as of earlier this year the company was making no revenue from mobile devices. Ms. Sandberg said that in addition to its Sponsored Stories ad service, which taps users to endorse a product to their contacts, Facebook also has deployed ad products on mobile that let companies with pages on the site pay to promote posts, for example.
Facebook also showed its core advertising business is accelerating, a concern for some investors. Ad revenue rose 36% to $1.06 billion compared with a year ago, higher year-over-year growth than the 26% reported in the second quarter.
Revenue from payments and other fees rose 13% to $176 million. Facebook earns a percentage of the money paid by users for virtual goods exchanged in social games on the site.
Total revenue was $1.26 billion. Facebook posted a loss of $59 million, or two cents a share, compared with a year-earlier profit of $227 million, or 10 cents a share. Excluding stock-based compensation and other items, earnings were flat at 12 cents a share.
Wall Street analysts surveyed by Thomson Reuters had predicted Facebook would post adjusted earnings of 11 cents a share and $1.23 billion in revenue.
Monthly active users, which hit one billion visitors early this month, climbed 26% from a year ago to 1.01 billion and daily active users rose 28% to 584 million. Mobile monthly active users were 604 million, up 61%.
During the second quarter, Facebook had 955 million monthly visitors and 552 million daily visitors.
The company said total costs and expenses rose 64% to $885 million.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
http://online.wsj.com/article/SB10001424052970203406404578075031008417120.html
By JOHN LETZING And BEN FOX RUBIN
Facebook Inc. FB +0.93% posted a quarterly loss Tuesday as costs mounted, but the social site also issued some encouraging data on its progress in making money from mobile phone use.
Shares of Facebook rose as much as 10% in after-hours trading as the company's earnings and revenue were slightly ahead of Wall Street's expectations. As of the close, the stock had fallen almost 50% from its initial public offering in May.
Overall, Facebook posted 32% revenue growth in the quarter compared with the period last year. That growth is flat with the prior period—its slowest rate in at least a year—and down from the 45% growth posted in the first quarter of this year.
But many investors appear to be focusing on where Facebook's ad revenue is coming from: The company said that 14% of its advertising sales in the period came from mobile devices. That percentage amounts to roughly $150 million.
Facebook has been dogged by criticism of its ability to make revenue from the growing use of its site on mobile phones.
In an interview, Facebook Chief Operating Officer Sheryl Sandberg noted that as of earlier this year the company was making no revenue from mobile devices. Ms. Sandberg said that in addition to its Sponsored Stories ad service, which taps users to endorse a product to their contacts, Facebook also has deployed ad products on mobile that let companies with pages on the site pay to promote posts, for example.
Facebook also showed its core advertising business is accelerating, a concern for some investors. Ad revenue rose 36% to $1.06 billion compared with a year ago, higher year-over-year growth than the 26% reported in the second quarter.
Revenue from payments and other fees rose 13% to $176 million. Facebook earns a percentage of the money paid by users for virtual goods exchanged in social games on the site.
Total revenue was $1.26 billion. Facebook posted a loss of $59 million, or two cents a share, compared with a year-earlier profit of $227 million, or 10 cents a share. Excluding stock-based compensation and other items, earnings were flat at 12 cents a share.
Wall Street analysts surveyed by Thomson Reuters had predicted Facebook would post adjusted earnings of 11 cents a share and $1.23 billion in revenue.
Monthly active users, which hit one billion visitors early this month, climbed 26% from a year ago to 1.01 billion and daily active users rose 28% to 584 million. Mobile monthly active users were 604 million, up 61%.
During the second quarter, Facebook had 955 million monthly visitors and 552 million daily visitors.
The company said total costs and expenses rose 64% to $885 million.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
http://online.wsj.com/article/SB10001424052970203406404578075031008417120.html