Facebook Inc., the biggest social network in the world, made an official statement revealing profit and revenue for the first quarter of 2014 that surpassed analysts estimates. The company posted a 72% increase in its first-quarter revenue and net income that is triple the size of its profit for the same period last year. The much-better-than-expected results posted by the social networking giant were mainly due to strong growth in mobile advertising and increasing number of monthly active users.
The founder and Chief Executive Officer of the company – Mr. Mark Zuckerberg described the situation as “strong and growing”. He also shared in the companys statement, which was cited by the Financial Times: “We’ve made some long-term bets on the future while staying focused on executing and improving our core products and business. We’re in a great position to continue making progress towards our mission.”
According to Facebooks statement, its revenue during the first three months of the current financial year grew by 72% and reached 2.5 billion dollars, surpassing the analysts forecast of a 2.36-billion-dollar gain. The company also revealed that its net income increased almost three times from 219 to 642 million dollars.
As reported by the Wall Street Journal, one of the analysts working at JMP securities – Mr. Ron Josey, commented on Facebook Inc.s announcement: “A year ago, Facebook was still viewed as more of an experimental ad buy. There is now a social line item when it comes to advertising budgets. And when you think of social, Facebook is the largest in the space.”
However, the company continues to face a challenge when it comes to smartphone profit over the last few quarters. The company dealt with the problem by investing in developing new products. Facebook also acquired the photo-sharing application Instagram, which is attractive to a large number of users. The company is also said to be working on a mobile-ad networks, while becoming more focused on making profit from gadgets. Evidence for the latter are the recent companys purchases of the company, such as the 19-billion-dollar deal for the acquisition of WhatsApp Inc. and the 2-billion-dollar deal with Oculus VR Inc.
Facebook Inc. was 2.65% down to close at 61.38 dollars per share yesterday, marking a one-year change of +136.18%. The market capitalization of the company more than doubled in the past year, reaching $157.32 billion as of yesterday. According to the information published on CNN Money, the 40 analysts offering 12-month price forecasts for Facebook Inc. have a median target of 75.00, with a high estimate of 90.00 and a low estimate of 60.00. The median estimate represents a +22.23% increase from the last price of 61.36.
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