About The Tribune-Review

The Tribune-Review can be reached via e-mail or at 412-321-6460.
Contact Us | Video | RSS | Mobile

Daily Photo Galleries

Tuesday - June 18, 2013

Business Photo Galleries

Esmark celebrates new headquarters in Edgeworth

Facebook Inc., operator of the world's biggest social network, said net income declined during the fourth quarter as the company ramped up investments in mobile and ad services that boosted costs.

Facebook's net income tumbled 79 percent to $64 million from $302 million a year earlier. Revenue rose 40 percent to $1.59 billion, Menlo Park, Calif.-based Facebook said on Wednesday. That compares with the average estimate of net income of $45.8 million on sales of $1.52 billion, according to data compiled by Bloomberg.

Facebook spent more to roll out new ad services, including mobile, in the past year as it grapples with rising competition for marketing dollars from larger rivals. While Google Inc. is expected to grab 57 percent of the U.S. mobile-ad market this year, Facebook is expected to remain a distant No. 2 with 12 percent, EMarketer Inc. estimates.

“A lot of these products are pretty new,” said Scott Kessler, an analyst with S&P Capital IQ, who rates the stock a hold.

Mobile contributed 23 percent of total advertising revenue, according to Facebook. That compares with 14 percent in the third quarter. Analysts at JPMorgan Chase & Co. expected mobile to contribute $384.2 million, or 27 percent of ad revenue in the latest quarter.

Facebook fell as much as 11 percent in extended trading. The shares advanced 1.5 percent to $31.24 at the close in New York. The stock has fallen 18 percent since the initial public offering price in May.

Profit excluding some items was 17 cents a share. That compares with analysts' prediction for 15 cents.

Facebook is investing in new products as it seeks to attract users and keep them on the site. Earlier this month, the company announced a revamp of its search service that lets members find information on people, places, photos and interests. The company has upgraded its mobile applications with new versions for phones running Google's Android software and Apple Inc.'s iPhone.

Facebook reached 1.06 billion users during the fourth quarter, up from 1.01 billion in the third quarter. The number of mobile users was 680 million, up from 604 million in the third quarter.

Analysts had been pushing up ratings amid growing optimism for accelerated revenue growth. The proportion of analysts covering Facebook with a buy rating has risen to 65 percent from from 52 percent on Oct. 23, when Facebook posted third-quarter sales that beat estmates, according to data compiled by Bloomberg.

--Editors: Reed Stevenson, Lisa Rapaport

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

1. Banks violate $25B mortgage settlement
2. Bernanke comments on stimulus’ end stagger stocks
3. Familiar face -- and company founder -- loses Men’s Wearhouse job
4. FedEx 4Q profit drops as economic growth is weak
5. Health care law remains deeply divisive
6. Fed suggests it’s closer to slowing bond purchases
7. Highmark to extend self-insurance plans to small businesses
8. PNC to phase out free checking accounts
9. More choose to buy into jobs
10. It’s about what you can bring
11. SEC investigation to continue into ‘suspicious’ acquisition of Heinz stock option

Subscribe today! Click here for our subscription offers.