Owing to strong advertising gains, the social media company posted earnings per share of $0.42 on revenue of $2.91 billion excluding one-time items. After an initial decline following the results, Facebook Inc (NASDAQ:FB) is presently (5:10PM EDT) trading at $74.07 up $2.78 or 3.91% in extended trading. Prior to the earnings call the company was up $2.02 on the day closing at $71.29 for a gain of nearly 3% in Wednesday’s trading.
Elation from Palo Alto to Menlo Park
“Strong performance across the board shows personalized marketing at scale is working,” said Sheryl Sandberg, COO of Facebook Inc (NASDAQ:FB). She added that Instagram is “seeing great results” in advertising but is “still taking it really slow.”
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In addition to the upside that still exists on Instagram ads, Facebook Inc (NASDAQ:FB) now has 1.5 million active advertisers up 50% from the 1 million active advertisers it had last June.
The Street was calling for earnings of $0.32 per share and anticipated sales of $2.81 billion according to Thomson Reuters.
The after-close announcement and gains weren’t limited to Facebook as LinkedIn, Twitter, Yelp and Weibo all posted gains following Facebook Inc (NASDAQ:FB)’s earnings beat in after hours trading.
FB mobile ads driving growth
“What’s happening here is advertisers are getting a good yield and a good return on investment with mobile ads,” said Martin Pyykkonen, senior research analyst at Rosenblatt Securities. “So they’re working from the advertisers’ side.”
Active mobile use was up nearly 40% from this time last year while total daily active users grew 19% year-over-year. To translate, in June Facebook saw an average of 650 million mobile users according to the company. Year-over-year mobile advertising sales were up 30% and now represent 62% of Facebook’s total advertising revenue.