Facebook profit dips, revenue surges on mobile ads

Facebook said monthly active users grew 13 percent year-on-year to 1.49 billion, but the gain was modest from the first quarter when it had 1.44 billion.

Facebook released its second quarter earnings report this afternoon, revealing revenues of more than $4 billion, and that mobile advertising represented about 76 percent of that revenue.

Its revenue for the quarter was $4.04 billion compared with its $2.9 billion revenue in the same period a year earlier.

Daily active users increased to 968 million in June, up 17% from the same month a year ago.

Of these, 1.31 billion accessed the service through mobile devices, a rise of 23 per cent.

“As we ramp Instagram ads, we remain focused on quality and relevance to insure the best experience for users and the best performance for marketers”, she said.

Still, Facebook turned in solid advertising revenue numbers.

The rush of earnings reports from the big West Coast companies concluded (I think) today with Facebook, which reported fantastic ad revenue growth, though net income was down (which isn’t making investors happy). Moreover, although it did not provide a breakdown between mobile and desktop views, the company did say that there are over 4-billion per day on the social network.

In all, Menlo Park, California-based Facebook Inc.’s second-quarter net income was $715 million, or 25 cents per share. Its total costs and expenses for the second quarter were $2.77bn, which was 82.2 per cent higher than they were a year ago.

The company said that costs will jump in the range of 55 to 60 percent in the current year as compared to 2014.

Facebook shares dipped 1.9 per cent in after-hours trade following the results, even though most of the figures were ahead of market expectations.

Sheryl Sandberg, Facebook’s chief operating officer, also said the huge increase in expenses was for “growth we need now and in the future”.

Excluding the impact of the stronger dollar, revenue would have been about $33 million higher.

The average estimate of 18 analysts surveyed by Zacks Investment Research was for earnings of 47 cents per share.

The stock price of Facebook (NASDAQ: FB) closed $96.99 per share, up by 1.78% on Wednesday.

Facebook’s continued and steady growth comes as rival Twitter has hit a wall. Earlier this month, Facebook began a new program to share advertising revenue with a select group of video partners.