Facebook, the world’s largest social-networking site, reported strong second-quarter revenue and profit Wednesday, blowing past Wall Street’s expectations and sending the stock up about 20 percent in after-hour trading.
The company said it had net income of $333 million, or 13 cents a share. Excluding stock-based compensation expenses, profit was $488 million or 19 cents a share, compared with 12 cents a share in the second quarter a year ago. Revenue soared 53 percent to $1.8 billion.
Wall Street analysts expected 14 cents a share on revenue of $1.62 billion, according to a survey by Thomson Reuters.
“We’ve made good progress growing our community, deepening engagement and delivering strong financial results, especially on mobile,” Facebook founder and CEO Mark Zuckerberg said in a statement. “The work we’ve done to make mobile the best Facebook experience is showing good results and provides us with a solid foundation for the future.”
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The company’s results show that its users are continuing to shift toward mobile phones and tablets to access the site instead of a computer’s Web browser. Although the total number of active monthly Facebook users worldwide grew slightly from the first quarter to 1.15 billion, the number of people who use its mobile versions at least once a month grew 9 percent to 819 million.
Of total advertising revenue, 41 percent came from mobile, up from 30 percent in the first quarter.
Users’ preference for accessing Facebook on the go has created unique revenue opportunities, such as ads that prompt users to install mobile apps like games. But advertisers are generally willing to pay much less for a mobile ad than they are for the desktop.
The company’s sharp revenue growth reflects increased competition among advertisers to reach Facebook’s large user base, said Rob Jewell, president of Spruce Media, a firm that helps advertisers like McDonald’s and the insurer Progressive to buy ads on the social network and measure their effectiveness.
Facebook’s ad rates are generally set through a bidding process, and Jewell said that his clients paid about 10 percent more on average for ads in the second quarter than in the first.
Ads in the news feed, both on the desktop and mobile versions of Facebook, were in particularly high demand, with rates up about 75 percent from the first quarter for both categories.
“Facebook is the best channel for mobile-app advertisers to purchase advertising,” Jewell said.
In the second quarter of 2012, the company had a net loss of $743 million, or 8 cents a share. But that figure included $1.3 billion in compensation expenses related to the company’s initial public offering. Excluding such one-time items, the company’s profit a year ago was $295 million, or 12 cents a share, and its revenue was $1.2 billion.