Facebook’s Second Quarter Earnings Beat Expectations; Share Prices Soar
Menlo Park, California based Facebook bagged one more stellar quarter supported by added number of users and a healthy mobile advertising business.
On Wednesday, Facebook reported its second quarter revenue and earnings that topped analysts' estimates. The news helped shares to climb about eight percent during the afterhours trading.
In April, Facebook came out with strong first quarterly reports in spite of heavy spending on some longer-term projects involving new hiring, artificial intelligence, virtual reality and expanding global Internet access.
Revenue moved up for the quarter that ended on June 30, approximately fifty nine percent to $6.44 billion compared to last year's $4.04 billion in Q2. The average expectation of analysts was $6.02 billion.
Most of Facebook's gains came from mobile ads that increased in number and also prices; mostly video advertisements.
Out of the total sales of Facebook, mobile ad revenue made up almost eighty four percent in the second quarter which compares to seventy two percent last year same three months period.
Facebook posted profit of 71 cents per share or $2.1 billion which surpassed analysts' estimates of 57 cents. Although, Facebook's success came from more number of ads on its apps making sure that they do not hamper user activity but moving ahead, the company should maintain a good balance. Facebook has three million or more active monthly advertisers, which is a steep rise compared to 2.5 million six months ago.