Facebook Move to Mobile Pays Off With Solid Earnings
For the fiscal year, Facebook brought in $5.1 billion in revenue—up from $3.7 billion in 2011—and non-GAAP net of $1.3 billion, up from $1.2 billion in 2011.Facebook, which after its May 2012 IPO said it would focus on growing its mobile audience to give its site and services more value, has done exactly that—and it's beginning to pay off. The billion-member social network revealed its fiscal Q4 2012 earnings Jan. 30, reporting revenue of $1.59 billion and non-Generally Accepted Accounting Principles (GAAP) profits of $426 million worth 17 cents per share. For the fiscal year, Facebook brought in $5.1 billion in revenue—up from $3.7 billion in 2011—and non-GAAP net of $1.3 billion, up from $1.2 billion in 2011. Much of that rise in income was due to improved advertising and services on mobile devices, CEO and founder Mark Zuckerberg said on a conference call to analysts and journalists. The company also has invested a substantial amount in product development over the last 12 months, Zuckerberg said.
Mobile Revenue up 9 Percent From Q3
Wall Street's outlook coming into this report was optimistic, with a consensus of analysts projecting a 34 percent upsurge in revenues from Q3 at about $1.525 billion. Facebook, however, outperformed those estimates, coming in at $1.59 billion. Like Apple, Google and VMware before it this week, investors immediately started to sell, with the stock slipping down about 7 percent and then back up to between 4 and 5 percent lower in after-hours trading. The stock closed at $31.24 and was selling for $30.22 at 4:30 p.m. Pacific time after hours. Nonetheless, it was a strong showing to close out the quarter and fiscal year for the Menlo Park, Calif.-based social network and Web services provider. Analyst Offers His Take "Facebook Q4 2012 results give cause for optimism and suggest the company is on the right track following its disappointing IPO and the lackluster two quarters that immediately followed," Eden Zoller, a principal analyst at Ovum, told eWEEK in an email. "What stands out from Facebook's Q4 results is the centrality of mobile for its service strategy and growth," said Zoller. "Walmart alone delivered 50 million mobile ads to customers. This solid progress on the mobile advertising front should be applauded."