Facebook Inc shares on Wednesday dipped from a record high after the world’s biggest online social network warned investors once again that its advertising revenue growth would likely come down from current high levels.
The warning appeared to outweigh Facebook’s surging quarterly profit and revenue, fueled by growth in its mobile ad business, which is still not showing much sign of slowing down as the company nears the five-year anniversary of its initial public offering.
Chief executive Mark Zuckerberg said in a statement it was a “good start to 2017.”
Facebook shares fell 2.7 percent in after-hours trading to US$147.60. They had closed at an all-time high of US$153.60 on Tuesday.
Chief financial officer David Wehner said on a conference call after the earnings announcement that the company expects its ad revenue growth to come down significantly over the rest of the year, repeating prior company warnings that it is hitting a limit in “ad load,” or the number of ads it can squeeze onto users’ pages before upsetting them.
Facebook said quarterly profit rose 76.6 percent year-on-year to US$3.06 billion and revenue went up 49 percent to US$8.03 billion.
The firm caused some brief confusion on Wall Street by only issuing numbers conforming to Generally Accepted Accounting Principles (GAAP) without warning.
Previously it also issued non-GAAP numbers, which it had said provided greater transparency and were closely watched by investors and analysts.
The social media giant is expected to generate US$31.94 billion in mobile ad revenue globally this year, up 42.1 percent from a year earlier, research firm eMarketer said.
That would give Facebook a 22.6 percent share of the worldwide mobile ad market, with archrival Google of Alphabet Inc projected to be the leader with a 35.1 percent share, eMarketer said.
Facebook continued its march toward the 2 billion user threshold, saying it had about 1.94 billion people using its service monthly as of March 31. That was up 17 percent from a year earlier.
Analysts on average had expected monthly active users of 1.91 billion, according to financial data and analytics company FactSet.
Net income attributable to Facebook shareholders rose to US$3.06 billion, or US$1.04 per share, in the first quarter from US$1.73 billion, or US$0.60 cents share, a year earlier.
Mobile ad revenue accounted for about 85 percent of the company’s total advertising revenue of US$7.86 billion in the first quarter ended March 31, compared with about 82 percent a year earlier.
Analysts on average had expected total ad revenue of US$7.68 billion, according to FactSet.
Earlier in the day, Zuckerberg said the company would add 3,000 people over the next year to monitor and remove murders, suicides and other inappropriate material from its network, which have become a threat to Facebook’s valuable public image.
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