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

Air Canada and Rickard’s seek Canada’s top bars

Promotion in enRoute magazine connects beer brand to top pubs in cities across Canada

Facebook’s ‘good’ quarter means ad revenue jumps 67%

Total users hits 1.32 billion, with 829 million on every day

Social Scanner: Social gets serious about shopping

Three big social networks make moves in ecommerce, plus Vine gains traction and Target partners with popular YouTubers

Vancouver homeless campaign generates buzz worldwide

Convertible bus benches seen as antidote to anti-homeless doorway spikes

CRTC fines four companies for telemarketing violations

CRTC imposes penalties for calls made to consumers on Do Not Call List

CRTC to meet with telecom/cable industry over paper bill fees

Fact-finding study finds “wide variance” on how such fees are approached

Sponsored content relies on, among other factors, storytelling, site credibility: IAB

New study outlines consumer attitudes towards native advertising

Alan Cross goes back to The Edge

New role will see the resurrection of The Ongoing History of New Music at the Corus-owned station which hopes to lure back lapsed listeners

Netflix turns its eye to international expansion

Streaming video company will also continue its aggressive pursuit of original content