By Alexei Oreskovic
May 1 Facebook Inc's mobile advertising
business continued to expand in the first three months of the
year, but the social network's rising spending restrained profit
Shares of Facebook were up 11 cents at $27.54 in after-hours
trading on Wednesday.
Mobile ad revenue, which accounted for 30 percent of
Facebook's ad revenue in the first quarter, was at the higher
end of the range analysts expected, said Macquarie Research
analyst Ben Schachter. But he said, "it needed to be higher for
people to get really excited about trend lines."
Facebook's advertising revenue growth, which slowed sharply
last year, has regained some momentum as the company has pushed
more ads to users on mobile devices such as smartphones and
tablets. In the fourth quarter, mobile ads accounted for roughly
23 percent of Facebook's revenue.
The world's largest social network said it now counts 1.11
billion monthly active users and about 665 million daily active
The company said the number of monthly users who logged on
solely through mobile devices more than doubled to 189 million
users from a year ago.
The company has rolled out a string of big product launches
and revamps in recent months, including an overhaul of its
newsfeed and search feature, as well an app for Android
smartphones that puts Facebook features front and center on
The various initiatives have contributed to rising spending,
with Facebook's 60 percent year-on-year increase in costs and
expenses outpacing the 38 percent revenue increase.
Facebook said it earned $219 million, or 9 cents a share, in
the first three months of the year, compared to $205 million, or
9 cents a share, in the year-ago period.
Excluding certain items, Facebook said it earned 12 cents a
share. Analysts polled by Thomson Reuters I/B/E/S were looking
for adjusted EPS of 13 cents.
Facebook's revenue in the first quarter totaled $1.46
billion, versus $1.06 billion in the year-ago period, and
roughly in line with analyst expectations. Advertising revenue
was up 43 percent in the first quarter, the fastest growth rate
since the end of 2011.