When it comes to tech companies, Facebook is easily the sole bright spot leaving behing Apple, Alphabet and Twitter, when it comes to earnings.
Facebook’s first quarter results blew past analyst estimates and that was driven by businesses spending more to advertise on its mobile app and a growing number of users.
Facebook had 1.65 billion monthly users as of March 31, an increase of 15 percent from a year earlier. Of these, 1.51 billion signed on using mobile devices at least once a month, an increase of 21 percent.
Chief Operating Officer Sheryl Sandberg said that as customers have shifted to mobile, businesses have followed.
So It’s a Good Time Then to Ask for More Freedom…
Founder and Chief Executive Officer Mark Zuckerberg seems to have taken advantage of the revenue beat to give himself more freedom to make some big bets. He proposed a new class of non-voting stock that will help him maintain a tight rein on the company and ensure he has the ability to keep spending on future technology, even if he pledges to give away most of his stock. The new stock structure is subject to shareholder approval.
Bloomberg Report“I see more bold moves ahead of us than behind us,” Zuckerberg said. With the new stock structure, “I’ll be able to keep founder control of Facebook so we can continue to build for the long term.”
Sandberg said that a “big part of Facebook’s success is due to Mark’s leadership.” The proposal, which must still be approved by shareholders, is intended to keep Zuckerberg in an active leadership role at Facebook, the company said.
Revenue Smashes Expectations
The social media giant reported earnings of $1.51 billion, or 52 cents per share, up from $512 million, or 18 cents per share, in the same period a year earlier. Adjusted earnings were 77 cents per share in the latest quarter, well above the 62 cents that analysts polled by FactSet were expecting.
Revenue was $5.38 billion, up from $3.54 billion. Analysts had forecast $5.26 billion.
Menlo Park, California-based Facebook’s shares jumped $9.82, or 9 percent, to $118.31 in after-hours trading. At that rate, the stock is set to open at an all-time high Thursday.
(With agency inputs)