Shares of Facebook soared 10% in early after-hours trading this morning, our time, after the social media network reported much stronger-than-expected revenue and earnings.
Facebook reported net income of $US2 billion, compared with $US719 million, in the second quarter of 2015.
Revenue for the period rose 63% to $US6.4 billion, compared with $US4 billion in the June quarter of last year.
Combined with the Apple third quarter result the day before, US tech shares are set for another solid rise tonight after Nasdaq closed at a new 2016 high this morning of 5319, up half a per cent.
Apple’ shares jumping 6%, one of the biggest on record, drove the Nasdaq higher and the Facebook numbers will add to the positive outlook tonight.The surge in Facebook shares eased a little in late after hours trading and the shares ended up 6.8%.
Facebook reported a big jump in Asia-Pacific revenues last quarter which topped $US1 billion in the region for the first time at $US1.025 billion. That was up from $US862 million in the previous quarter and $US623 million in the same quarter of last year.
News of Facebook’s continuing surge in advertising revenue underlined how far the likes of Twitter has been left behind.
Facebook’s release and comments came a day after Twitter warned of a sharp slowdown in its own advertising business as it lost its share of advertisers’ social media marketing budgets.
It also came two days after former online advertising giant, Yahoo fell to a takeover offer from US telco, Verizon.
Analysts pointed out that it was another strong performance in mobile advertising that helped boost Facebook’s strong second quarter, with mobile now accounting for 84% of its mobile revenues, two percentage points higher than the first three months of the year.
Print media companies are feeling the pain – led by News Corp, Fairfax Media, UK publishers such as The Guardian, papers in Canada, Germany, Japan and elsewhere.
Mark Zuckerberg, Facebook’s chief executive officer, said the company was “particularly pleased with our progress in video”, which would eventually be “at the heart of all our services”.
The latest quarter saw the release of the Facebook Live video service to all the network’s users, turning it into an instant online hit. No wonder all media companies, print and broadcast and streaming video, are feeling the pain and are worried – there is worse to come.
It also raised fresh questions about the company’s growing intrusion on the media industry, as well as its wider impact political discourse, particularly after a user live-streamed an encounter with a police officer shortly after the fatal shooting of her boyfriend.
In one sign of Facebook’s growing audience engagement on mobile devices, the number of users who visited the site on a mobile device every day rose above 1bn for the first time, reaching to 1.03bn.
The mobile user base was equivalent to 91.6 per cent of all of Facebook’s daily users, up from 90.1 per cent the year before.
