Facebook Inc's quarterly revenue rose more than 50 percent, handily beating Wall Street expectations as its wildly popular mobile app and a push into live video lured new advertisers and encouraged existing ones to boost spending.
People are silhouetted as they pose with mobile devices in front of a
screen projected with a Facebook logo, in this picture illustration
taken in Zenica October 29, 2014. REUTERS/Dado Ruvic
REUTERS: Facebook Inc's quarterly revenue rose more than 50
percent, handily beating Wall Street expectations as its wildly popular
mobile app and a push into live video lured new advertisers and
encouraged existing ones to boost spending.
Facebook also announced a proposal to create a new class of
non-voting shares, which would be given as a dividend to existing
shareholders.
The company's shares rose 9.5 percent in after-hours trading on Wednesday.
The dividend of non-voting shares would allow Chief
Executive Mark Zuckerberg, who plans to give away the majority of his
wealth, to sell part of his stake in Facebook without giving up any of
his voting control. That way, Facebook said, Zuckerberg could remain in
an "active leadership role".
Mobile ad revenue accounted for about 82 percent of total ad revenue
in the first quarter ended March 31, compared with about 73 percent a
year earlier.
Facebook said it had 1.65 billion monthly active users as of March 31, up from 1.44 billion a year earlier.
Competition in the mobile video market has been growing,
especially between Facebook, Snapchat and YouTube. Facebook has been
rolling out new features to encourage advertisers to experiment further
with video and migrate to the platform from television advertising.
The results showed success attracting advertisers and the
company was able to expand its operating profit margin to 55 percent
from 52 percent a year earlier, in the process.
"The company consistently 'warns' about higher spending, but
they consistently manage their spending to deliver earnings upside.
They’re an impressive company, and they leave very little room for
criticism," said Wedbush Securities analyst Michael Pachter, who called
the operating margin a good surprise.
The results come after disappointments for investors from several major Silicon Valley firms.
“After Intel and IBM last week, and then Twitter and Apple
yesterday, this is by far the best number I’ve seen in technology,” said
Daniel Morgan, senior portfolio manager at Synovus Trust Company which
owns about US$40 million worth of Facebook shares, commenting
specifically about Facebook ad revenue.
The company's net income attributable to common shareholders rose to
US$1.51 billion, or 52 cents per share, in the first quarter from US$509
million, or 18 cents per share, a year earlier.Excluding items, the company earned 77 cents per share, beating Wall Street's 62-cent consensus.
Total revenue rose to US$5.38 billion from US$3.54 billion, with ad revenue increasing 56.8 percent to US$5.20 billion.
Analysts on average had expected a profit of 62 cents per share and revenue of US$5.26 billion.
If the stock proposal is approved, the company intends to issue two shares of Class C capital stock as a one-time stock dividend for each share of Class A and Class B common stock.
Zuckerberg and his wife, Priscilla Chan, announced last year that they would give away 99 percent of their Facebook shares to fund charitable endeavors.
(Reporting by Anya George Tharakan in Bengaluru; Editing by Bernard Orr)
- Reuters
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