Facebook Shares Rally On Second Quarter Earnings


Shares of social media giant Facebook Inc soared to a record high by as much as 4% during the after-hours trading on Wednesday after the company delivered a second quarter earnings beat that met most analyst estimates.

Facebook who has been expanding its video and display advertisements to the site’s mobile application experienced a rise in its mobile advertising sales which forms the majority of Facebook’s overall revenue or about 87 of its total revenue from advertising.

For the quarter that ended last June, the company’s total revenue amounted to $9.16 billion which is about 84% higher during the same period last year. Compared to most analyst estimates of $9.2 billion, the company delivered $9.32 billion for the second quarter with $8 billion coming from its mobile ad revenue alone. Facebook’s earnings came at around $1.32 per share beating most estimates of $1.13 earnings per share. Facebook’s profits jumped by 71% year over year to $3.894 billion during the second quarter.

The social media company also reported monthly users of 2.01 billion compared to most expectations of 1.98 billion which is 17% higher than the last year’s second quarter and 3.4% higher than the previous quarter. Facebook now has a daily user estimate of 1.32 billion people. Revenue was also attributed to Instagram’s continued success with an even brighter growth outlook although Facebook did not disclose specific numbers from its Instagram sales.

Aside from developing and coming up with new ways to make revenues out of Facebook’s newsfeed, the company also has been trying to come up with new ways to earn aside from the application home page with the company warning that its advertising growth might be hampered during the next couple of months although any sign of weakness has not been seen so far.

This was announced by Facebook chief operating officer Sheryl Sandberg during the earnings call stating that the company would be ‘slow and deliberate’ regarding the rollout of more ads.

The company will begin rolling out business advertisements on Facebook’s Messenger app later this month. However, Facebook CEO Mark Zuckerberg has previously mentioned that Facebook’s advertising strategy still revolves around video for the next two years with plans to test out and experiment with other advertising forms in the near future.

Facebook shares which jumped by 4% during the after-hours trading on Wednesday has gained almost 44% since the beginning of the year and has recorded another all-time high during Wednesday’s trading session.

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