Facebook Profit Climbs 34% On Strong Mobile Ad Growth

(RTTNews) - Social networking giant Facebook, Inc. (FB) said Wednesday after the markets closed that its fourth quarter profit rose 34% from last year, as revenue surged amid strong growth in mobile advertising.

The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue.

This marks the company's eleventh quarterly results since going public through a much hyped IPO in May 2012.

"We got a lot done in 2014. Our community continues to grow and we're making progress towards connecting the world," said Mark Zuckerberg, Facebook founder and CEO.

Facebook shares are currently losing 1.69% in after hours trading after closing the day's regular trading session at $76.24, up 46 cents. The shares trade in a 52-week range of $53.19 to $82.17. Facebook joined the S&P 500 Index on December 20, 2013.

The company's advertising revenue for the fourth quarter surged 53% year-over-year to $3.59 billion and constituted more than 93% of total revenue.

Facebook has now become a big hit with mobile phone users. Facebook's mobile ad revenue represented about 69% of advertising revenue for the fourth quarter, up from about 66% in the prior quarter and 53% in the prior year quarter.

The company ended the fourth quarter with 1.39 billion monthly active users, an increase of 13% from a year earlier. Daily active users were 890 million on average for December, up 18% from last year. Mobile monthly active users surged 26% to 1.19 billion at December 31.

For the fourth quarter ended December 31, 2014, Menlo Park, California-based Facebook reported net income of $701 million or $0.25 per share, compared to $523 million or $0.20 per share for the year-ago quarter.

Excluding items, adjusted net income for the fourth quarter was $1.52 billion or $0.54 per share, compared to $814 million or $0.32 per share in the prior year quarter.

On average, 43 analysts polled by Thomson Reuters expected the company to earn $0.48 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Revenue for the fourth quarter rose 49% to $3.85 billion from $2.59 billion in the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, fourth quarter revenue would have increased by 53%. Forty-one analysts had a consensus revenue estimate of $3.77 billion for the fourth quarter.

Total costs and expenses for the quarter jumped 87% to $2.72 billion, with R&D expenses more than doubling from a year earlier. As a result, operating margin for the fourth quarter shrank to 29% from 44% a year earlier. However, adjusted operating margin for the quarter remained steady with last year at 58%.