Facebook surges on robust mobile advertising sales

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. The company’s revenue was $5.84 billion, up 52% from $3.85 billion in the same period a year earlier. “As someone who is in Facebook every single day running ads I knew mobile was going to be big for them”, said Molly McCarty, 3Q Digital, a digital marketing company. “Our community continued to grow and our business is thriving”. The company was also highly optimistic about engagement on its various platforms continuing to grow and reported 1 billion users on Whatsapp and 100 million hours of daily video playback on Facebook as the company continues to try to compete with Youtube. Mobile also continues to be the main way most people browse the world’s most popular social network, with 1.44 billion people using Facebook on a monthly basis.

Net income attributable to common shareholders rose to $1.56 billion, or 54 cents per share, in the three months ended December 31 from $696 million, or 25 cents per share in the same period of 2014. Facebook is in the initial phase of mining revenue from its trendy Instagram service and video library, which is expanding rapidly.

Facebook revenue surged to $5.8 billion in the all-important holiday quarter of 2015, shattering Wall Street estimates and far surpassing the $3.6 billion it generated a year earlier.

As a result, Facebook shares rose nearly 12 percent in after-hours trading to Dollars 105.32, reports Reuters.

The strong revenue growth was supported by increased revenue per user, as the growth in the number of users slows.

Approximately 80 percent of the company’s advertising revenue last quarter came from ads on mobile devices.

Most of its revenue are from space in its News Feed to advertisers.

Earnings results on the bottom line had been a little spotty for Facebook over the past few quarters, with an average earnings surprise of -1.89 percent over the past few quarters, not including the results just posted.

The median target on the stock is $140, suggesting that Facebook could add $129 billion in market value over the next 12 months.

“If you’re an advertiser and you want to reach mass scale, you only have two options: Facebook and Google”, said James Cakmak, an analyst at Monness Crespi Hardt and Co.