Facebook soars after 2Q results beat estimates
SAN FRANCISCO (AP) — Facebook's stock is flying high after the world's biggest social network posted higher revenue from mobile ads and delivered a healthy second-quarter profit that reversed a loss a year earlier.
The results, which come in the heels of weaker-than-expected results from online search leader Google Inc., signal that Facebook's aggressive push into the mobile advertising market continues to pay off. The company began showing mobile advertisements for the first time last spring. Today, Facebook said mobile ads accounted for 41 percent of its total advertising revenue.
The Menlo Park, Calif.-based company's stock jumped $4.93, or 18.6 percent, to $31.44 in extended trading after closing at $26.51. The stock priced at $38 when Facebook went public in May 2012 and hasn't hit that since.
"I'm completely surprised," said Gartner analyst Brian Blau, summing up the sentiments of many investors who've watched Facebook's stock price stagnate over the past year due in large part to concerns about its mobile prospects.
"I was actually thinking that maybe they would have a soft quarter," he added, citing a softening of advertising revenue — Facebook's bread and butter — across the industry. "That seems not to be the case."