Facebook shares soar after Q4 tops estimates

Facebook’s stock jumped more than 14 percent to $107.95 after the company reported a blockbuster quarter on Wednesday, pushing the company’s market capitalization over $300 billion.

Menlo Park, California-based Facebook’s fourth-quarter profit surged to $1.56 billion or $0.54 per share from $701 million or $0.25 per share previous year.

Put another way, 65.41 percent of all Facebook members use the service daily, and 64.86 percent of mobile members use it daily as well. The power of advertising was also emphasised as Facebook disclosed 5.6 billion USA dollars (£3.9bn) in revenue for the quarter, an increase of 57% on the same period in 2014.

The social network has beat estimates in each of the last five quarters, according to Zacks.

Facebook’s strengths such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, growth in earnings per share and expanding profit margins outweigh the fact that the company has had somewhat disappointing return on equity. Oculus VR plans to start shipping its $599 Rift virtual-reality headset in March. For the first time, more than 90% of those users came to Facebook on mobile devices.

Capital expenditures for the quarter amounted to $692 million.

In another sign of Facebook’s progress, its share of the digital advertising market rose from 8 percent in 2014 to 10 percent worldwide past year, according to the research firm eMarketer Inc.

Mobile-only MAUs are defined as users who accessed Facebook exclusively through mobile apps or mobile versions of our website, or used our Messenger app, in the last 30 days of the given quarter. Facebook shares rose almost three percent in after-hours trading on the NASDAQ.

Facebook said mobile ads accounted for 80 percent of total ad revenue in the quarter, compared with about 78 percent in the third quarter and 69 percent a year earlier.

Apart from focussing on mobile, Facebook has been ramping up spending on what it calls “big bets”, including virtual reality, artificial intelligence and drones to connect the remotest parts of the world to the Internet.