Social networking giant Facebook has posted a 60 percent surge in revenue in the third quarter. Shares initially soared at the news, but later fell amid fears that teenagers may be losing interest.
Facebook Inc. beat Wall Street expectations for the second straight quarter on Wednesday when it posted a 60 percent revenue increase between July and September.
Revenue grew to $2 billion, (1.5 million euros), from $1.26 billion in the third quarter, generating a profit of $425 million, Facebook reported. According to financial research company FactSet, analysts, on average, had been expecting revenue of $1.91 billion. The figures are also a marked improvement on the $59 million loss posted in the same period last year.
"The strong results we achieved this quarter show that we're prepared for the next phase of our company as we work to bring the next 5 billion people online and into the knowledge economy," CEO Mark Zuckerberg said in a statement.
The third quarter results were primarily driven by advertising revenue, which rose to $1.8 billion, up 66 percent from a year earlier. Almost half of that was generated by revenue from mobile adverts which appear on mobile devices.
Facebook has made a concerted push to become "mobile-first" and the boosted mobile ad figures - which stood at just $150 million in the same period last year - suggest that strategy could be paying off.
Trading spike short-lived
Facebook's quarterly figures prompted an initial surge in trading with shares soaring as much as 15 percent after hours.
The stock quickly took a downturn, however, falling to $47.40, down 3 percent from its $49.10 close. The stock settled at $49.16.
The drop followed a remark made by Facebook finance chief David Ebersman in an earnings call, which appeared to spook investors. Ebersman said the company had witnessed a decrease in daily use among young teenagers, an important but fickle demographic.
"Our best analytics shows use by US teens overall stable, but a decrease in use by younger teens," Ebersman said.
According to Facebook its number of monthly active users stood at 1.19 billion at the end of September, up 18 percent from a year ago. Of these, 728 million logged in every day during the month of September - a 25 percent increase on a year earlier.
ccp/jr (AFP, Reuters, dpa)