Facebook shares soar on mobile ad growth

The company says mobile advertising grew by more than a third as revenue and earnings jump. The stock tops $30 after hours.

By Charley Blaine Jul 24, 2013 3:51PM
MSN Money staff graphicUpdated: 5:30 p.m. ET

Facebook (FB) shares were soaring after hours Wednesday, as second-quarter earnings and revenue handily beat Wall Street estimates.

The shares were trading above $30, a level they haven't seen since February, as the company reported a 58% increase in earnings per share and a 53% increase in revenue.

Mobile advertising revenue helped fuel the gains. It was 41% of revenue in the quarter, or $743 million, and CEO Mark Zuckerberg said Facebook has more mobile users than regular users. The health of the mobile business was a key question ahead of the report.

Facebook earned 19 cents a share after one-time charges in the quarter, up from 12 cents a year ago. Analysts had been looking for 14 cents, with some thinking it might reach 15 to 17 cents. Revenue was $1.81 billion, up from $1.18 billion a year ago and ahead of the Street estimate of $1.62 billion.

The shares were up $5.10, or 19.2%, to $31.61 at 5:20 p.m. ET. The regular close of $26.51 was up 38 cents. With the closing price, the shares are up 6.6% in July but down 0.4% on the year -- a residue of the company's legendarily awful initial public offering in May 2012. If the after-hours price holds on Thursday, the shares will be up more than 18% on the year.
Facebook has struggled to right the ship since its IPO. It went public at $38 a share and promptly crashed. The price was too high, and there were serious technical problems in getting trades executed at Nasdaq. The shares bottomed at $17.55 in early September. The shares are up more than 50% since that bottom, but it has struggled since Jan. 28, when it hit $32.51.

Ahead of the report, investors were hoping for a bullish view of Facebook's mobile business, which generated about 30% of revenue in the first quarter. They got it.

There was also concern about its international business. It has had little presence in China or India. About 75% of revenue comes from the United States, Canada and Europe.

And there will be questions from analysts on the 5 p.m. ET conference call -- about Facebook's success with Instagram and other features. Instagram had more than 100 million users in the first quarter, and the company on Sunday said its Facebook For Every Phone application is being used by 100 million people a month.

Daily active users averaged 699 million in the quarter, up 27% from a year ago. The company had 1.15 billion monthly active users as of June 30. Of those, mobile users were 819 million.

Facebook's earnings came after stocks were flat or modestly lower. The Dow Jones industrials ($INDU) fell 26 points to 15,542. The Standard & Poor's 500 Index ($INX) was off 6 points to 1,686, while the Nasdaq Composite Index ($COMPX) was basically flat at 3,578.

The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, finished up 10 points to 3,041. Facebook was the eighth-best performer. Apple (AAPL) was the leader, up $21.52 to $440.51. The gain added 18 points to the index.

Broadcom (BRCM), off $4.82 to $27.01, was the laggard.

More from Top Stocks
5Comments
Jul 24, 2013 4:50PM
avatar
Agreed Zoot....

FACEBOOK, the only invention driven by a hundred thousand Egomaniacs
and devised by the biggest Self-Lover of them all, who stole the idea from
his classmates, then tried to rip the financier out of his shares.

So, its all about "ME" now and "monetization"....Sheesh, what is this planet
coming to?

Jul 24, 2013 4:37PM
avatar
A far cry from the $45.00 expected shortly after becoming 'public'........you can have FB, it is a childish junior high experience.........I put some chili into the crock pot this morning, it should be ready when I get home from work....who cares!!!
Jul 25, 2013 7:47AM
avatar
all fix lies from facebook again  all tax money !!!
Jul 25, 2013 2:32AM
avatar
Zoot125 and 4Loveof Money,

Thank you for staying away from FB. You see, unlike the dimwits that both of you are, I just made over $100K on FB stock.  Why, you ask!? Because I look at the value of the stock and where it's headed, instead of childish / junior  / emotional nonsense.

By the way, it's not "hundred thousand Egomaniacs"  But over one billion egomaniacs.  Keep up your narrow minded outlook on stocks and I'm sure you will earn a few dollars, here-n-there, on those safe dividend stocks.

Suck it up boys, you blew it big time and rationalization will not mend the missed opportunity.....
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

118
118 rated 1
270
270 rated 2
472
472 rated 3
714
714 rated 4
624
624 rated 5
608
608 rated 6
623
623 rated 7
445
445 rated 8
319
319 rated 9
125
125 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
BIDUBAIDU Inc10
BMYBRISTOL-MYERS SQUIBB CO.10
CELGCELGENE CORP10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.