Facebook’s earnings nearly tripled and revenue grew sharply in the first quarter, surpassing Wall Street’s expectations thanks to an 82 per cent increase in advertising revenue.

It was the fourth quarter in a row that Facebook beat forecasts as it continues to barrel ahead in mobile advertising at a time when nearly 80 per cent of its users are accessing it on smartphones and other portable gadgets.

The world’s biggest online social network said yesterday that it earned $642 million, or 25 cents per share, in the January-March quarter, up from $219 million, or 9 cents per share, in the same period a year ago.

Adjusted earnings, which exclude stock compensation expenses and other costs, were $885 million, or 34 cents per share, in the latest quarter.

Facebook’s revenue was $2.5 billion, up 71 per cent from $1.46 billion in the same period a year ago.

Analysts, on average, were expecting adjusted earnings of 24 cents per share on revenue of $2.36 billion, according to a poll by FactSet.

Shares of Menlo Park, California-based Facebook climbed $2.34, or 3.8 per cent, to $63.71 in extended trading after the results came out. The stock had closed down $1.67, or 2.7 per cent, at $61.36 amid a broader market decline.

There were 1.28 billion monthly Facebook users at the end of March, up 15 per cent from a year earlier. The number of users who log in every day increased 21 per cent to 802 million.

The number of Facebook users who log in at least once a month using mobile devices climbed 34 per cent to surpass 1 billion for the first time. Daily mobile users were 609 million, up 43 per cent from a year ago.

Advertising revenue totalled $2.27 billion. Of this, mobile advertising accounted for $1.34 billion, or 59 per cent. That’s a bigger share than in the fourth quarter of 2013, the first time mobile accounted for more than half of Facebook’s ad revenue, at 53 per cent.

Facebook held a 6 per cent share of worldwide digital ad revenues last year, according to research firm eMarketer, which expects the company’s share to grow to nearly 7 per cent this year.

Google, in comparison, garnered 32 per cent of worldwide digital ad spending in 2013 and is expected to drop slightly to a fraction below that number by the end of 2014.

On the mobile front, Facebook accounted for nearly 15 per cent of worldwide ad revenue and is expected to steal some of Google’s share this year to grow to 22 per cent.

In comparison, Google’s share was 49 per cent last year and is expected to drop to about 47 per cent by 2014’s end.

Facebook CFO to step down

Facebook in a press release said that David Ebersman is stepping down as chief financial officer after serving in the position for almost five years. He will be succeeded by David Wehner on June 1, 2014.

Currently, David Wehner is Facebook's Vice-President, Corporate Finance and Business Planning. Ebersman will remain with the company through September.

"David has been a great partner in building Facebook, and I'm grateful for everything he's done to help make the world more open and connected," said Zuckerberg.

"David set us up to operate efficiently and make the long term investments we need, and built an incredibly strong team including Dave Wehner, our next CFO. I look forward to working with Dave in his new role."

(This article was published on April 24, 2014)
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