By Reed Albergotti
Facebook Inc. displayed new evidence of its advertising momentum
as it posted first-quarter earnings that nearly tripled, giving the
company more resources to challenge bigger players in the
technology industry.
Revenue climbed 72% to $2.5 billion, beating the $2.36 billion
expected by analysts, as online retailers and other advertisers
increasingly use Facebook ads to boost sales.
Shares rose about 4% in after-hours trading.
"Facebook's business is strong and growing, and this quarter was
a great start to 2014," Chief Executive Mark Zuckerberg said in a
prepared statement. "We've made some long-term bets on the future
while staying focused on executing and improving our core products
and business."
The company also said Chief Financial Officer David Ebersman is
stepping down later this year after serving in the role for about
five years to return to the health-care industry.
He will be succeeded as of June 1 by David Wehner, who is
currently vice president of corporate finance and business
planning. Mr. Wehner was previously finance chief at Zynga.
The social network also continued to grow its user base with
monthly active users increasing 15%, to 1.28 billion. The
percentage of users who log in to the service every day--therefore
more valuable to Facebook because they look at more ads and enter
more personal information that can be mined for ad targeting--grew
21% to 802 million.
The company's strong revenue numbers, in a quarter when
advertising sales are traditionally weak, come as Facebook plans
expansions in two key areas.
Later this month, the company plans to launch both a mobile-ad
network, which will allow advertisers to buy ads on other mobile
apps using Facebook data, and video ads, which Facebook hopes will
bring in ad dollars that otherwise would have gone to
television.
Facebook has continued to capitalize as its users shift to
mobile devices. Revenue from advertising climbed 82% from the prior
year to $2.27 billion, with mobile advertising contributing about
59%. That metric rose from 30% a year earlier and 53% in the fourth
quarter of 2013. After hesitating to embrace the global shift to
mobile, Facebook has quickly adapted, making mobile its top
priority.
Facebook reported net income of $642 million, 25 cents a share,
up from $219 million, or nine cents a share, a year earlier.
Excluding certain expenses, Facebook said earnings would have been
34 cents a share, up from 12 cents a year earlier. Analysts polled
by Thomson Reuters expected 24 cents a share.
The world's largest social network has been on an acquisition
tear this year, effectively moving to transform itself into a tech
portfolio company. It reached a $19 billion deal for
mobile-messaging service WhatsApp and agreed to pay $2 billion for
virtual-reality headset maker Oculus VR.
Write to Reed Albergotti at reed.albergotti@wsj.com
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