Facebook Earnings: It’s a Mobile Blowout!

FB shares erupt in early after-hours trading Wednesday

   

Facebook (FB) might finally be ready to turn 2013 around.

FB shares — which were flat for the year-to-date through the close of Wednesday’s trading, were up nearly 20% right after the bell following the release of Facebook earnings, which showed great things for the company’s second quarter.

Facebook posted a big-time earnings beat as profits spiked by 58% year-over-year to 19 cents per share, beating the consensus by a nickel. That came on revenues that surged 53% to $1.81 billion, also beating estimates for $1.62 billion.

In light of recent weakness from other big Internet stocks like Google (GOOG) and Yahoo (YHOO), this was an impressive earning.

There were virtually no signs of FB fatigue in the Q2 Facebook earnings report. Daily active users jumped by 27% YOY to 699 million, and active mobile users were up a staggering 51% to 819 million.

A key to this was the Facebook for Every Phone program in which the company has focused on building apps for feature phones, which still are prevalent in emerging markets. The company now totals 100 million MAUs in this segment.

More importantly, Facebook continues to be aggressive with monetization, especially on the mobile front. Mobile traffic now accounts for a whopping 41% of ad revenues (the Street was expecting 33%), vs. next to no part of revs when the company came public in May 2012.

While product development seemed weak, considering flops like Camera and Poke, Facebook might have found some creative spark. Instagram’s Vine-like video app saw 5 million videos uploaded within the first 24 hours of launch. Meanwhile, the company also has been getting traction with hashtags and embedded posts.

There was little to criticize about Facebook earnings — and might finally be a sign that the beleaguered social media company is getting out of its funk.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/07/facebook-earnings/.

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