Third quarter Facebook financial report: Robust revenues and superb revenue growth

Living up to its billing Facebook again registered a superb revenue growth as it made its presence felt in the mobile niche. However, the social media giant has experienced a shares drop due to the analyst’s doubts that the robust growth will continue to sustain the same rate. To date Facebook which commands more than 1.35 billion users worldwide is worth a whopping $200 billion. With the upcoming festive season the company is cinched to spring some more surprises with its surging sales in the mobile segment.

Facebook surpassed the analysts’ revenue predictions for the tenth straight quarter with flying colors according to the company’s report that was disclosed last Tuesday. The report had stated the detailed profits of $806 million, translating to 30 cents per share, which is anchored on the immense $3.2 billion revenues. The immense revenues mark for the first time that Facebook had breached the $3 billion in revenues for one quarter.  According to Thomson Reuterssurvey the impressive revenues aided Facebook to better the analysts forecast for the company that it will register third-quarter revenues of $3.12 billion. Facebook also seized the number one position in the adjusted-profit projections category.

These healthy revenues are testament that the company is becoming stronger every day says the company’s founder and CEO Mark Zuckerberg in a conference call Tuesday.

The sheer hard work of Facebook in the mobile industry paid off. After declaring that the company enters the mobile segment without intentions of monetizing their efforts two years ago, the company now managed to pileup massive revenues by pouncing on the mobile ads. The mobile ads revenues now comprised 2/3 of Facebook’s total advertising revenues.

It is not surprising that Facebook will be a big hit in the mobile market since the company boasts of a mammoth 1.35 billion active users on its fold and 1/3 from this access the site with their mobile handsets.

Stern Agee analyst Arvid Bhatia who made a precise forecast of Facebook’s 66 percent mobile-revenues ratio said, “We expect this shift and strength in mobile to continue.” He added, “We believe over the next two years, mobile advertising revenue could represent about 80 percent of total advertising revenue for Facebook.”

It appears like Facebook efforts of investing a lot in the mobile segment to bolster its revenues gained success by leaps and bounds. The company had earlier added two companies on its growing lists of acquisitions. Facebook had purchased Instagram for $1 billion and WhatsApp for $16 billion. The company also resorted to divide and conquer stratagem as it separated its Facebook Messenger from its core mobile app, compelling the users to make transition into the stand-alone app.

The Facebook app which is offered free at the moment is not yet bringing in revenues to the company yet, although Zuckerberg stated that Instagram users are spending a healthy average of 21 minutes per day in the app, while Facebook Messenger users are replying to messages 20% faster in the stand-alone app. A quick glimpse of the performance of its newly-acquired WhatsApp messaging app, Facebook had revealed in a federal filing that the app yielded only $10.2 million revenues so far this year while investing $148.7 million.

Facebook also values patience on its other broad market portfolio especially in the gaming segment saying that it will take before it will produce revenue. The company had also acquired virtual-reality company Oculus for $2 billion and whipped up a prediction that company will post up to 47% revenue growth this quarter as compared to the same period last year. The company had tallied a strong 59% growth in the third quarter

The company’s Chief Financial Officer, David Wehner, also revealed that expenses would increase further in 2015 because of its growing workforce and higher stock-compensation costs.

Facebook shares appeared to be affected by the industry analysts’ predictions of slower growth and higher costs: After posting a record closing high of $80.77 Tuesday with a 0.6% daily increase, its shares eventually plummeted to below $75 in after-hours actions.


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