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Zuckerberg dazzles Wall Street with Q3 mobile progress

Juan Carlos Perez | Oct. 25, 2012
Facebook, which had been in the doghouse with Wall Street since it went public, wowed investors with its third-quarter report on Tuesday, in particular with its improvements and early results in the crucial mobile market.

Facebook overall results topped the consensus expectations of financial analysts polled by Thomson Reuters.

Revenue rose 32 percent to US$1.26 billion, compared with $954 million in the third quarter last year, and exceeded the $1.23 billion that financial analysts had expected.

Its net loss was $59 million, or $0.02 per share, compared to net income of $227 million, or $0.10 per share in the third quarter last year. On a pro forma basis, excluding items such as stock-based compensation, Facebook reported earnings of $0.12 per share, beating expectations by a penny.

Ad sales during the quarter accounted for 86 percent of revenue -- the rest came from payments and other fees -- and Zuckerberg highlighted new ad products like Facebook Exchange and Custom Audiences aimed at improving targeting to make them more effective.

Facebook also made a move in the e-commerce space during the quarter with the launch of its Gifts service, which encourages people to buy presents for friends.

Zuckerberg reiterated the company's commitment to its application platform. Facebook wants to be the platform of choice for all third-party developers who want to add social networking capabilities to their applications and sites, he said.

Regarding games, Zuckerberg said that while revenue from embattled gaming developer Zynga dropped 20 percent during the quarter, payments revenue from other game developers grew collectively by 40 percent.

Costs and expenses rose 64 percent to $885 million, though excluding stock-based compensation and related payroll tax expenses, costs and expenses were up 57 percent, to $737 million.

 

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