Facebook income down during 4Q
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 email@example.com
To contact the editor responsible for this story: Tom Giles at firstname.lastname@example.org
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Health insurers will refund $5.2M to Pa. subscribers, group plans
- Wabtec 2Q profit jumps 18.9%; raises forecast for year
- Dick’s cuts PGA professionals as golf business declines
- Rising number of health care workers have less than 4-year degree, study shows
- Europe thirsts for U.S. craft beer
- Wesco posts higher profit, lowers full year outlook
- EQT posts $110.9 million profit in latest quarter
- Study: Google dominates driverless car buzz
- Latrobe’s Ci Medical Technologies transforms to medical device business
- Chrysler recalls up to 792K Jeep SUVs for ignition switch defect
- 1,600 StubHub accounts breached, N.Y. official says