Feb 1, 2017

Facebook posts monster numbers thanks to mobile ads

Facebook announced Wednesday that it blew past investor estimates in its fourth quarter earnings, jumping to $3.57 billion in profit, mostly due to mobile advertising growth. In total, advertising revenue grew 53%, and 84% of its total advertising revenue growth in Q4 came from mobile. In an interview with TechCrunch, Facebook's Chief Finance Officer David Wehner also said the tech giant added more users in Q4 than any in its history.

By the numbers, via CNBC:

  • $8.81 billion in revenue vs. $8.51 billion expected
  • $1.41 adjusted earnings per share vs. $1.31 adjusted per share expected
  • 1.23 billion Daily active users (DAUs) vs.1.19 billion expected
  • 1.86 billion Monthly active users (MAUs) vs. 1.83 billion expected

What a difference five years makes ....

  • Facebook's mobile ad revenue from Q4 2011: 0%
  • Facebook's mobile ad revenue from Q4 2016: 84%

For investors: Shares elevated to about three percent after the earnings call. Per Yahoo!, Facebook shares rose after seven of its previous 12 earnings announcements, and Facebook's adjusted earnings per share have now topped estimates for the last 13 quarters.

What matters: Heavy advertising growth, particularly on mobile, should help to relax investor concerns over major investments in virtual reality and augmented reality technologies, as well as big acquisitions like WhatsApp. But Facebook warned investors they should still continue to expect ad revenue to "come down meaningfully" in 2017, as the company works through ways to monetize video while newsfeed inventory continues to plateau. Earnings were announced shortly after Facebook lost a $500 million virtual reality headset case against ZeniMax Media Inc. for stolen technology. Mark Zuckerberg asked investors to be patient as the company continues to make large-scale investments in new technologies.

Go deeper

Sanders requests recount of Iowa recanvass after results show shrunken margin

Photo: Joe Raedle/Getty Images.

Sen. Bernie Sanders said in a statement Tuesday night he will request a recount of the Iowa Democratic Party's recanvass results.

Where it stands: Both Buttigieg and Sanders requested partial recanvasses in Iowa last week after results were delayed and showed several errors following a software malfunction on caucus night.

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Energy deputy secretary nominee faces heat after contradicting Trump

Mark Menezes speaks at a forum in Addis Ababa, Ethiopia, June 12. Photo: Minasse Wondimu Hailu/Anadolu Agency/Getty Images

Trump administration officials are internally raising concerns about President Trump’s nominee for Energy deputy secretary, who appeared to openly contradict the president on nuclear waste storage at Nevada’s Yucca Mountain last week.

Driving the news: While speaking at a House Energy and Commerce subcommittee hearing last Wednesday, Mark Menezes told members of the panel that the Trump administration is still interested in storing nuclear waste at Yucca Mountain and that “what we're trying to do is to put together a process that will give us a path to permanent storage at Yucca."