Facebook Inc on Wednesday posted surprisingly strong profit and revenue growth as the world’s largest social network grew even larger, with a spike in mobile users and advertising that lifted its stock to an all-time high.
The company reported audience numbers that suggest it is poised to take on mainstream media as an advertising force, helping investors to overlook Facebook’s huge spending on hiring and building data centers.
Facebook now has 8 billion video views per day from 500 million people, compared with 4 billion views in April.
Photo: Bloomberg
In addition, Facebook’s Web site and Instagram photograph-sharing app, which opened up its platform to all advertisers in the third quarter, account for more than 1 in 5 minutes spent on mobile devices in the US, Facebook chief operating officer Sheryl Sandberg said.
“In the medium to long run, we believe that we’re not competing between Facebook and Instagram. We’re competing with other forms of media,” Sandberg told analysts on a conference call after the earnings report.
Facebook had 1.55 billion monthly active users as of Sept. 30, up 14 percent from a year earlier. Of these, 1.39 billion used the service on mobile devices.
“Growth is happening across the board and we’re of course looking for a lot of growth in the future in emerging markets,” Sandberg said in an interview. “We’re also pretty focused on helping bring the next set of people who are not online, online.”
Advertising revenue grew 45.4 percent to US$4.30 billion, with 78 percent of that amount coming from mobile versus 66 percent in the same period last year.
Facebook did not disclose Instagram’s advertising sales figures. However, the app is expected to bring in US$595 million in mobile advertising revenue this year, research firm eMarketer said. Its advertising revenue is projected to grow to US$2.8 billion by 2017.
Facebook’s huge US$3 billion spending, up 68 percent from the third quarter last year, did not seem to worry investors or analysts.
“I think the investors would like the company to continue to invest given that the opportunity is pretty large,” Susquehanna Financial Group analyst Shyam Patil said.
The stock rose about 5 percent to an all-time high of US$109.34 in extended trading, before paring gains to about 4 percent. It closed earlier at US$103.94.
Total revenue jumped to US$4.5 billion in the third quarter, from US$3.2 billion a year earlier. Analysts had expected revenue of US$4.37 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to stockholders rose to US$891 million, or US$0.31 per share, from US$802 million, or US$0.30 per share.
Excluding items, the Menlo Park, California-based company earned US$0.57 per share, ahead of analysts’ average estimate of US$0.52 per share.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts