Facebook soars to new heights on upbeat earnings

SAN FRANCISCO :  Facebook shares rocketed to an all-time high as investors welcomed solid earnings for the social networking giant, which has seen big gains in advertising and better connections in mobile and video.
Shares in Facebook rose 4.6 per cent to close at USD 108.76 yesterday, pushing the company’s market value to more than USD 306 billion.
The stock, which struggled following its public offering in 2012, has seen spectacular gains from the low of USD 17.72 in September 2012.
Facebook’s market value is now roughly equal to that of online giant Amazon (USD 307 billion) and above that of industrial conglomerate General Electric (USD 299 billion).
However, it remains well below the world’s biggest company by market value, Apple (USD 674 billion), Google parent Alphabet (USD 523 billion) and Microsoft (USD 434 billion).
In its quarterly update Wednesday, Facebook said surging mobile advertising lifted its profits and revenues and that its user base grew to over 1.5 billion people.
Net profit in the third quarter jumped 11 per cent from a year ago to USD 891 million as revenues leaped 41 per cent to USD 4.5 billion, despite the negative impact of a strong dollar.
The vast majority was from advertising, and mobile accounted for 78 per cent of ad revenues in the quarter, compared with 66 per cent a year earlier.
Facebook said the number of monthly active users of the network hit 1.55 billion, up 14 per cent from a year earlier, with more than a billion using Facebook daily. And it counted some 1.39 billion of its members using mobile devices such as smartphones or tablets.
Jefferies analyst Brian Pitz said in a research note that Facebook’s results were impressive, getting more advertising in mobile and establishing itself as a player in video, with more than eight billion videos viewed daily.
This ramps up Facebook as a video rival to YouTube and opens up a new stream for ad revenues.
“We think Facebook looks well positioned to capture an increasing portion of TV ad budgets as markets migrate toward data-driven, highly-targeted online video ad campaigns,” Pitz said, estimating that this “could be worth some USD 17 billion a year in the US alone.” (AGENCIES)


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