Mobile Use Key in Facebook Q3 Earnings Beat

Shares of Facebook (Nasdaq: FB  ) soared more than 12% after hours when the social network reported revenue and earnings that beat estimates:

Metric

Q3 2012 Estimate

Q3 2012 Actual

Q3 2011

Actual Growth (YOY)

Earnings per share

$0.11

$0.12

$0.12

0%

Revenue

$1,230 million

$1,262 million

$954 million

32.3%

Source: Yahoo! Finance.

But the beat wasn't the story, mobile was. Facebook answered critics in reporting a 61% increase in the number of active users accessing the service via a handheld device each month. Mobile also accounted for 14% of all advertising revenue in Q3.

"As proud as I am that a billion people use Facebook each month, I'm also really happy that over 600 million people now share and connect on Facebook every month using mobile devices," CEO and founder Mark Zuckerberg said in a press release (link opens PDF).

The mobile gains come months after a complete rebuild of Facebook's app for Apple's (Nasdaq: AAPL  ) popular range of iOS devices. Previously, the company toyed with plans to compete with the Mac maker via its own smartphone and a Web-based version of Facebook built specifically to circumvent the App Store.

Other figures of note:

  • Non-GAAP operating income rose 8.5% to $525 million.
  • Facebook hosted 584 million daily active users in September, a 28% year-over-year increase.
  • Monthly active users rose to 1.01 billion over the same period, a 26% improvement.
  • Operating cash flow fell 56% from $565 million to $250 million.

Finally, in related news: social-game maker Zynga (Nasdaq: ZNGA  ) , which relies heavily on Facebook for its revenue, reported plans to cut 5% of its workforce and reduce its investment in controversial game The Ville. In August, the game became the subject of a copyright infringement suit brought by Electronic Arts (Nasdaq: EA  ) . The suit claims Zynga poached three top executives for the express purpose of gaining the intelligence required to rip off EA's The Sims Social. Zynga has since counter-sued, claiming "unlawful business practices," and then last week sued a former employee for allegedly swiping trade secrets.

Of course, Facebook has created plenty of its own problems. A hyped IPO that turned out to be a dud, to name just one. Investors can hardly be blamed for avoiding this stock. And yet there's so much more to Facebook than meets the eye, as we outline in this new premium research report. Find out whether there is anything to "like" about the social network today, and we'll tell you whether we think Facebook deserves a place in your portfolio. Access your report by clicking here.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's web home, portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Apple and Facebook. The Fool has bought calls on Facebook. Motley Fool newsletter services have recommended buying shares of Facebook and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2072976, ~/Articles/ArticleHandler.aspx, 10/24/2014 8:17:20 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement