Facebook wows investors with whopping profits

This was the first time Facebook had posted results of more than a billion dollars in a single quarter.

During the same period, Facebook’s profits also doubled year-on-year to £1.56bn, despite the company investing heavily in expansion of its mobile ad network, along with ambitious projects like virtual reality, artificial intelligence and its Internet.org initiative.

Revenue in the quarter that ended on December 31 rose to $5.84 billion from $3.85 billion the prior year.

Facebook Inc smashed investors’ expectations with a 52-per cent jump in quarterly revenue as it sold more ads targeted at a fast-growing number of mobile users, sending its shares sharply higher after hours.

Revenue for the full year 2015 came in at $17.93 billion, up 44 percent year-on-year, while income from operations was $6.23 billion, up from $4.994 billion in 2014. A good stock price at least helps keep that new talent flowing in as Facebook looks to continue iterating its products and bring the rest of the world online.

The growth was fueled by more people joining the world’s biggest social network, with more than 1.59 billion users logged on every month, especially on smartphones and tablets, Bloomberg reported. It also has Instagram, which continues to add users and has become a crucial second advertising platform for the company.

“It’s much stronger ad growth than we were expecting”, said Ken Sena, an analyst at Evercore ISI. Google’s share shrank from 32 percent in 2014 to 30 percent a year ago. Instagram has more than 400 million users. Adjusted net income came in at $2.3 billion, or $0.79 per share.

However, the way people are using Facebook is changing.

Social networking remains Facebook’s main bread and butter. Between the Oculus Rift finally becoming a reality, Free Basics expanding and near-domination of emerging markets through Messenger and Whatsapp, 2015 has arguably been one of Facebook’s best years. Asian continent revenue jumped 19 percent compared to last quarter to $846 million registering an increase of 14 percent.

Facebook’s buoyant results are in contrast to the woes of fellow tech giant Apple which – despite posting record quarterly profits of $18.4bn- saw shares plunge as it saw a sharp slowdown in sales growth of its iPhones and forecast a fall in volumes for the current period.