Mobile ad sales soar
28 July, 2017, 12:00 am
FACEBOOK Inc surpassed quarterly profit and revenue estimates yesterday as the social media giant found more ways to attract advertisers to its mobile app including its centerpiece product, the Facebook News Feed, sending its shares to an all-time high.
The company’s stock was up 1.6 per cent at $168.25 after the bell. Through yesterday’s close, the share price had climbed nearly 44 per cent this year.
Total revenue rose 44.8 per cent to $9.32 billion, beating the average forecast of $9.20b among analysts tracked by Thomson Reuters I/B/E/S.
“In mobile we’re continuing to see great strengths,” Facebook chief financial officer David Wehner said in a phone interview.
“We’re seeing more and more ad dollars getting allocated to mobile, and we think that trend will continue,” he said.
Net income attributable to Facebook shareholders rose to $3.89b, or $1.32 per share, in the second quarter ended June 30 from $2.28b, or 78 cents per share, a year earlier.
Analysts on average had expected earnings of $1.13 per share, according to Thomson Reuters I/B/E/S.
Mobile ad revenue accounted for 87 per cent of the company’s total advertising revenue of $9.16b in the latest quarter, up from 84 per cent a year earlier.
Facebook is expected to generate $36.29b in net digital ad revenue this year, a 35 per cent jump from 2016, according to research firm eMarketer.
Facebook has not said how much of its revenue is attributable to its Instagram unit, though the photo-sharing app has become a greater focus of its business.
“Clearly, the biggest driver of growth is, overall, Facebook News Feed,” Mr Wehner said. “Instagram is making a contribution, and an increasing contribution.”
Facebook said about 2.01 billion people were using its service monthly as of June 30, up 17 per cent from a year earlier.