Facebook’s Q1 soars to surpass expectations, CFO to step down

Facebook’s earnings nearly tripled and revenue grew sharply in the first quarter, surpassing Wall Street’s expectations thanks to an 82% increase in advertising revenue. It was the fourth quarter in a row that Facebook beat forecasts as it continues to barrel ahead in mobile advertising at a time when nearly 80% of its users are […]

Facebook’s earnings nearly tripled and revenue grew sharply in the first quarter, surpassing Wall Street’s expectations thanks to an 82% increase in advertising revenue.

It was the fourth quarter in a row that Facebook beat forecasts as it continues to barrel ahead in mobile advertising at a time when nearly 80% of its users are accessing it on smartphones and other portable gadgets.

The world’s biggest online social network said Wednesday that it earned $642 million, or 25 cents per share, in the January-March quarter, up from $219 million, or 9 cents per share, in the same period a year ago.

Adjusted earnings, which exclude stock compensation expenses and other costs, were $885 million, or 34 cents per share, in the latest quarter.

Facebook’s revenue was $2.5 billion, up 71% from $1.46 billion in the same period a year ago.

Analysts, on average, were expecting adjusted earnings of 24 cents per share on revenue of $2.36 billion, according to a poll by FactSet.

Shares of Menlo Park, Calif.-based Facebook climbed $2.34, or 3.8%, to $63.71 in extended trading after the results came out. The stock had closed down $1.67, or 2.7%, at $61.36 amid a broader market decline.

There were 1.28 billion monthly Facebook users at the end of March, up 15% from a year earlier. The number of users who log in every day increased 21% to 802 million.

The number of Facebook users who log in at least once a month using mobile devices climbed 34% to surpass 1 billion for the first time. Daily mobile users were 609 million, up 43% from a year ago.

Advertising revenue totalled $2.27 billion. Of this, mobile advertising accounted for $1.34 billion, or 59%. That’s a bigger share than in the fourth quarter of 2013, the first time mobile accounted for more than half of Facebook’s ad revenue, at 53%.

Facebook held a 6% share of worldwide digital ad revenues last year, according to research firm eMarketer, which expects the company’s share to grow to nearly 7% this year. Google, in comparison, garnered 32% of worldwide digital ad spending in 2013 and is expected to drop slightly to a fraction below that number by the end of 2014.

On the mobile front, Facebook accounted for nearly 15% of worldwide ad revenue and is expected to steal some of Google’s share this year to grow to 22%. In comparison, Google’s share was 49% last year and is expected to drop to about 47% by 2014′s end.

Facebook also said its chief financial officer, David Ebersman, is leaving on June 1 after five years. He’ll be replaced by David Wehner, currently vice-president of corporate finance and business planning.

“David set us up to operate efficiently and make the long term investments we need, and built an incredibly strong team including Dave Wehner, our next CFO,” CEO Mark Zuckerberg said in a statement.

Facebook’s results came the same day the Federal Trade Commission cleared its $2 billion acquisition of Oculus VR, a maker of virtual reality goggles. The company also agreed to buy WhatsApp, a mobile messaging service, for $19 billion during the first quarter. The company is largely using Facebook stock to make both purchases.

Facebook’s valuation and the exorbitant price tags of the deals is raising questions among tech industry experts about whether the sector is in the midst of a bubble not seen since the turn of the century.

“I’m troubled by the astronomical valuations in tech,” wrote Endpoint Technologies Associates analyst Roger Kay on Forbes.com this week. “Tech isn’t separate from the rest of the economy. Inflation in tech bleeds into, pumps up, infuses other sectors.”

Media Articles

Freshii selects OneMethod for digital and social work

This marks the fast-food franchise's first digital and social agency of record

Apps — Facebook has an ad for that

New tool enables advertisers to reach consumers likely to take in-app action

Kirstine Stewart leaves Twitter

The social media site's first Canadian hire leaves the company after three years

Salad King marks anniversary with food truck tour

Toronto restaurant to donate partial proceeds to Second Harvest

Blue Ant planning changes for AUX brand?

Outgoing editor says media company is making 'sudden changes' to AUX.tv

Netflix phones it in on latest promotion

Partnership with Pattison Outdoor includes 'stranger phones' in subway stations

Evolve to represent EA Games in Canada

Company will sell a variety of ad units across console and mobile platforms

Zoom Media buffs up with fitness focus

Revenue is growing for the company targeting active lifestyle consumers