Facebook Inc. (FB) reported third-quarter sales that topped analysts’ estimates as advertisers boosted spending on promotions targeting users on smartphones and tablets. The shares rose as much as 18 percent.
Revenue rose 60 percent to $2.02 billion, the company said in a statement today. Analysts were projecting on average sales of $1.91 billion, according to estimates compiled by Bloomberg. Profit, excluding stock-based compensation, currency effects on revenue and other items, was 25 cents a share, compared with analysts’ average prediction for 19 cents.
Facebook Inc., which has more than 1 billion users, has been building features to ad services to make it easier for marketers to reach consumers as they check on their friends’ activities via wireless devices.
Facebook, which has more than 1 billion users, has been building features to ad services to make it easier for marketers to reach consumers as they check on their friends’ activities via wireless devices. Mobile-ad revenue made up 49 percent of the total in the third quarter, up from 41 percent in the previous period, the company said. Analysts estimated on average 45.6 percent of mobile-ad sales.
“Mobile is probably at the top of everyone’s mind,” said Scott Kessler, an analyst at S&P Capital IQ in New York who rates Facebook the equivalent of a hold. “It’s driving growth, it’s driving engagement. Facebook has been showing an increasing percentage of revenues from mobile.”
The shares of Facebook, based in Menlo Park, California, climbed as high as $57.98 in extended trading. The stock declined less than 1 percent to $49.01 at the close in New York, leaving it up 84 percent this year.
Net income was $425 million, or 17 cents a share, in the third quarter, as the social-networking service continued to invest in equipment, staff and services. That compared with a loss of $59 million, or 2 cents, a year earlier.
User Growth
Facebook had 1.19 billion users during the quarter, up from about 1.15 billion in the second quarter. The number of mobile users rose 6.7 percent to 874 million.
Facebook surprised investors in July with second-quarter revenue and profit that exceeded estimates, boosting investors’ confidence that the company is succeeding in selling ads that target wireless users. The stock climbed 30 percent the next day, and in August topped $38, the price at the company’s initial public offering in May 2012.
Facebook, which didn’t roll out a mobile ad service until early 2012, has been upgrading its services. Earlier this month, the company said it was expanding a service to let companies target users based on their online activity outside of the social network. Facebook’s Instagram unit for sharing photos and videos from mobile devices is set to start selling promotions as well.