Facebook Inc released its Q3 2015 earnings on Wednesday and Wall Street seems to be pleased with the results. The numbers show that the tech giant’s revenue rose 41% to $4.5b due to an increase in mobile ad spending. The results beat the forecast of $4.37b to mark a 36% increase from $3.2b a year ago. “That’s really robust growth,” said S&P Capital analyst Kesseler. “Its strength is getting investors more interested.”
Mobile adverts sales made up 78% of total ad earnings in the third quarter, a 66% rise from a year ago. The increase in mobile ads shows the kind of headway Facebook is making in its quest to lure advertisers with the ad products designed to target users on mobile gadgets. Shares closed with 1.33% gains and then it soared 4% in after-hours trading to $107.75 to mark a new 52-week high price.
Video Views and Mobile Minutes
Facebook says it has 8B daily video views in Q3 – roughly 75% of videos are watched on mobile gadgets, which makes the giant social network a strong threat to Google’s You Tube in the fight for TV ad money.
Facebook also owns prime mobile apps that could lure ad dollars – Instagram, WhatsApp and Messenger, and investors are keen on the earnings potential of these apps. David Wehner, the firm’s CFO, says the firm is focused on building “great products” and “driving user growth” but has no urgent plans to make money from the apps. “The business side is not the main focus right now,” he said during a conference call with analysts.
Sheryl Sandberg, the firm’s chief operating officer, said Instagram and Facebook currently account for one in five minutes spent on mobile in the US and that there’s much upside potential ahead. “We had a good quarter and got a lot done,” Mark Zuckerberg, the firm’s founder and CEO said in a written statement.
Barring certain expenses, the tech giant posted earnings per share of $0.57 a 33% rise from EPS of $0.43 a year ago. This topped the expected earnings per share of $0.52 to mark 21% increase from the $0.4343 reported a year ago. Costs and expenses soared more than earnings by 68%. The firm’s operating margin fell 57% as the firm spends much money on projects such as artificial intelligence, enabling internet access to emerging markets and virtual reality.
Facebook is cementing its control
Financial Times reports that Facebook is set to unveil a standalone app to be used for receiving real-time news will be launched next week. The news app, Notify, is ready to make its debut and various media outlets such as Vogue, CNN, The Washington Post and Mashable are reported to be among the content partners.
Obviously, Facebook wields huge power within online media and content makers are eager to reach its 1.53B MAUs. The Notify App follows the official rollout of Instant Articles, the platform’s quick-loading feature to iOS last month and publishers are keen on supporting the format.