Facebook Inc (FB) Soars on Earnings Beat, Mobile Ad Sales


The stock price of Facebook (NYSE:FB) surged more than 12% to $105.90 per share during the extended trading on Wednesday, January 27.  Investors were pleased with the social network giant’s outstanding earnings and mobile advertising sales for the fourth quarter of 2015.

Facebook 4Q financial results

During the fourth quarter, Facebook generated earnings of $0.79 per share, a 46% increase from $0.54 per share in the same period in 2014. The company’s revenue was $5.84 billion, up 52% from $3.85 billion in the same period a year earlier.

Wall Street analysts expected the social network giant to deliver earnings of $0.68 per share and $5.37 billion in revenue.

According to Facebook, its mobile advertising revenue represented approximately 80% of its advertising revenue compared to 69% in the same period in 2014.

The social network giant recorded $692 million in capital expenditures, and $2.14 billion in free cash flow. It ended the quarter with $18.43 billion in cash, cash equivalents and marketable securities.

Facebook active users

Facebook has 1.04 billion daily active users (DAUs) 1.59 billion monthly active users (MAUs) on average, up by 17% and 14%, respectively as of December 31.

It has 934 million mobile DAUs and 1.44 billion mobile MAUs on average, an increase of 25% and 21%, respectively, as of December 31.

In a statement, Facebook Mark Zuckerberg, said, “2015 was a great year for Facebook. Our community continued to grow and our business is thriving. We continue to invest in better serving our community, building our business, and connecting the world.”

For the full year 2015, Facebook generated earnings of $2.28 per share and $17.92 billion in revenue. In 2014, the company recorded $1.77 in earnings per share on $12.26 billion in revenue.

Commenting on the company’s financial performance, Brian Wieser, an analyst at Pivotal Research, said, “Clearly the numbers are just stellar in terms of revenue growth, profitability— all the metrics that really matter. Facebook’s numbers affirm its co-dominance of the industry with Google. These paces of growth on such large bases of pre-existing revenue just remind you what remarkable gains Facebook continues to make in the industry.”

On the other hand, Wedbush Securities analyst Michael Pachter, said, “The Internet is capturing more share of advertising and Facebook is capturing the lion’s share of that growth.”