By Rishika Sadam
Facebook Inc (FB.O) reported higher-than-expected quarterly profit and revenue as the world's largest social network continues to benefit from its aggressive push into mobiles and video.Facebook's shares were up 2.7 percent at $136.78 after the bell on Wednesday.Mobile ad revenue accounted for 84 percent of company's total advertising revenue of $8.63 billion in the fourth quarter ended Dec. 31, compared with 80 percent a year earlier.Analysts on average had expected total ad revenue of $8.31 billion, according to research firm FactSet StreetAccount.Facebook said mobile daily active users rose 23 percent to 1.15 billion. About 90 percent of Facebook's users access the network through mobile devices.The strong results allay some concerns after the company warned in November that ad growth would likely slow "meaningfully" due to limits on "ad load" - the total number of ads Facebook can show to each user.
The social media giant has been reaping benefits from a robust growth in its user base, which helped it gain a majority share in the market.However, many analysts have raised concerns about Facebook's ability to meet its own targets it sets every quarter.Apart from the core Facebook network, which contributes a lion's share to the overall revenue, the company's photo-sharing app Instagram and messaging service Whatsapp also have a huge user base.
Facebook has been adding features to attract more users and retain those already on the network, with the feature to tackle fake news being the most recent addition.The company said about 1.86 billion people were using its service monthly as of Dec. 31, up 17 percent from a year earlier.Facebook is expected to generate about $29.71 billion in mobile ad revenue in 2017, according to research firm eMarketer, up about 35.2 percent from 2016.
Net income attributable to Facebook shareholders rose to $3.56 billion, or $1.21 per share, from $1.56 billion, or 54 cents per share, a year earlier.Excluding items, the company earned $1.41 per share.Total revenue rose to $8.81 billion from $5.84 billion.Analysts on average had expected a profit of $1.31 per share on revenue of $8.51 billion, according to Thomson Reuters I/B/E/S. (Reporting by Rishika Sadam in Bengaluru; Editing by Saumyadeb Chakrabarty)
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Updated Date: Feb 02, 2017 03:30 AM