Facebook tops Wall Street estimates, sends shares soaring

By on January 30, 2014, 9:30 AM
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Facebook may not be adding new users at the same pace it once was but the company has certainly figured out how to monetize the users they do have. The company on Wednesday reported fourth quarter earnings that beat Wall Street expectations and sent shares soaring in after-hours trading.

The leader in social networking posted a net income of $780 million on revenue of $2.6 billion during the final three months of 2013. Wall Street analysts anticipated earnings of $703.5 million on $2.3 billion in revenue.

During a conference call on the matter, Facebook CEO Mark Zuckerberg said last quarter was the first in which more than 50 percent of their revenue came from mobile. Specifically, revenue from advertising was up 76 percent compared to a year ago. Overall, Facebook managed to capture 18.4 percent of all mobile ad spending in 2013.

Facebook noted 1.23 billion active monthly users during the quarter, an increase of 16 percent from the same period a year ago. Addressing the recently decline of teen usage on Facebook, CFO David Ebersman revealed that such usage had declined slightly but said they didn’t have any other data to report on the matter at the moment.

As of writing, Facebook stock is up 12.12 percent in after-hours trading. But according to Edward Jones analyst Josh Olson, the company will need to continue to show new ways to grow moving forward.




User Comments: 7

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MilwaukeeMike said:

Good for them, but I don't know if it will last. The product FB produces that people like and use is a social network. The stuff they make money on is the stuff we don't like and wish we didn't have to put up with: advertising. That's not a good long term business model.

H3llion H3llion, TechSpot Paladin, said:

FB won't go down unless they will screw over the consumer too much. The integration with Facebook in our daily lives is just too big. This is something that MySpace never had. I believe it will only keep rising for next couple of years and of course we will see dips but just as anything, it will recover. Now it may level off but it won't suddenly dip low.

As long as Facebook keeps up to date with new technology and makes sure that its head first in the Online world, it will NEVER phase out, just like Google it is simply too strong and its integration is EVERYWHERE.

umbala said:

Good for them, but I don't know if it will last. The product FB produces that people like and use is a social network. The stuff they make money on is the stuff we don't like and wish we didn't have to put up with: advertising. That's not a good long term business model.

Oh yeah? And where do you think Google makes most of their profit?

NicktheWVAHick said:

Facebook will continue to grow into much more than just a social media jauggernaut. As their cash reserves grow they will continue to purchase an increasing number of other companies, eventually swallowing such communication behemoths as AT&T and Verizon. The FTC will allow this to happen under the not-so-watchful eye of our failed government that will be run by the super-rich. Your own personal resistance to using Facebook will be futile if u want to place a phone call or use the internet. Finally, in 2036 the last 4 companies in America, Facebook, Amazon, Microsoft and Exxon will pit their workers against one another in an epic battle for supremacy that will take place at the convergent point of the 4 remaining states in which each corporation resides. This will happen in our lifetime.

spectrenad said:

Facebook will continue to grow into much more than just a social media jauggernaut. As their cash reserves grow they will continue to purchase an increasing number of other companies, eventually swallowing such communication behemoths as AT&T and Verizon. The FTC will allow this to happen under the not-so-watchful eye of our failed government that will be run by the super-rich. Your own personal resistance to using Facebook will be futile if u want to place a phone call or use the internet. Finally, in 2036 the last 4 companies in America, Facebook, Amazon, Microsoft and Exxon will pit their workers against one another in an epic battle for supremacy that will take place at the convergent point of the 4 remaining states in which each corporation resides. This will happen in our lifetime.

LOL nice movie scenario. I'd buy a ticket for the premiere

jeffz6 said:

Is facebook advertising even effective? I cant speak for everyone, but I know I have never click on or payed any attention to the ads.

Unless we believe electrolytes is everthing the world needs.

MilwaukeeMike said:

Oh yeah? And where do you think Google makes most of their profit?

It's not the same. Google makes their money by showing you ads for things you've searched for. They can charge more because the people buying ads know that the people who will see the ads are interested in their stuff. Google is giving people things they want.

FB just shows you ads. And I should have been clearer. I don't really think FB is going to stop being used by people for all the reasons @H3llion mentioned. But this is a story about FB beating investors expectations, and I don't think that's going to last. Maybe they can pull it off and continue to grow, but I expect FB's revenue to plateau if they can't think of some other way to feed us ads.

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