Facebook loses profit but grows reach
Facebook’s profit in the first quarter has plunged 20 per cent from a year ago, but the company says revenues got a lift from robust growth in mobile advertising.
The world’s biggest social network also boosted the number of users to 1.44 billion, up 13 per cent from a year earlier, including 1.25 billion accessing Facebook on mobile devices.
Net profit in the quarter for shareholders dropped to $US509 million ($A656.14 million), amid hefty increases in spending on research and share-based compensation.
Overall revenues jumped 42 per cent to $3.5 billion, led by advertising gains, slightly below Wall Street forecasts, as Facebook felt the impact of a strong dollar.
Excluding the impact of foreign exchange rates, revenue would have increased by 49 per cent, the company said.
“This was a strong start to the year,” said Mark Zuckerberg, Facebook founder and chief executive, said on Wednesday.
“We continue to focus on serving our community and connecting the world.”
Facebook has been investing heavily in research and new projects, including a drone air fleet to deliver the internet to remote areas of the world.
Earlier on Wednesday, Facebook unveiled a new mobile application called Hello, which allows its users to see who is calling by searching the social network’s vast base of members.
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It also allows users to search for people and businesses on Facebook and call them using the app.
Facebook got the bulk of its revenues from advertising inserted in user feeds, especially from mobile.
Revenue from advertising was $3.32 billion, a 46 per cent surge from a year ago. Mobile accounted for 73 per cent of this, up from 59 per cent a year earlier.
But spending grew 83 per cent from a year ago to $2.61 billion, in line with guidance from the company. That included more than $1.0 billion on research on items such as new ad products and virtual reality, which is being integrated into Facebook offerings.
In after-hours trading, Facebook shares slipped 1.8 per cent to $83.11 following the results.
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