Facebook shares soared 15% Wednesday on blowout quarterly results -- but the stock lost steam after the company admitted young teens are losing interest in the site.
"We did see a decrease in
[teenage] daily users [during the quarter], especially younger teens,"
Facebook chief financial officer David Ebersman said Wednesday, during
the company's third-quarter earnings conference call with analysts. He
said Facebook usage among overall U.S. teens was "stable," however.
Previously, Facebook had defended itself against multiple recent
studies and articles proposing that teens don't find Facebook cool
anymore. Last quarter, CEO Mark Zuckerberg said it "just isn't true"
that the company has a problem with the teen market.
Ebersman's
admission -- coupled with other bits from Wednesday's call, including
the fact that Facebook isn't planning to ramp up the number of ads in
users' feeds -- sent Facebook shares slightly lower in after-hours
trading.
That was a big disappointment given that Facebook (FB, Fortune 500)
shares had been up as much as 15% earlier in the evening, after blowing
away Wall Street's sales and profit expectations for the third quarter.
Facebook's sales jumped 60% over the year to more than $2
billion. Excluding one-time charges, Facebook earned $621 million --
double the company's profit during the same quarter last year.
Strong mobile results: Perhaps
even more pleasing to investors was that Facebook's mobile business in
particular came in very strong. Mobile ads now account for 49% of all
Facebook ad revenue, up from 41% last quarter and easily beating
analysts' expectations.
That's impressively rapid growth, considering that Facebook began serving mobile ads just last summer.
Before Facebook launched those ads, the company's lack of mobile
monetization had been a particular sticking point for investors. Shortly
after the company filed for an initial public offering last May,
Facebook disclosed that it wasn't making "any meaningful revenue"
from its growing pool of mobile users. That kept the stock in the
doldrums until the company finally launched mobile ads in August 2012.
Now, Facebook stock is up 123% over the past year.
Ad revenue brought Facebook $1.8 billion in sales for the quarter -- and the average price per ad rose 42% from last year.
The remaining $218 million of Facebook's total sales came from fees
that the company collects, including the cut off the top it takes from
in-app payments.
Facebook now has 1.2 billion monthly active users overall, and 874 million mobile monthly active users.
On the negative side, Facebook's expenses of $1.3 billion rose 45% over
the year. The company attributed the jump to hiring more people and to
increased infrastructure costs.
Facebook also said it had $9.3 billion in cash on hand at the end of the quarter.
Meanwhile Facebook has also been working to monetize Instagram, the
photo-sharing app it purchased last year. Earlier this month, Instagram announced that it will begin placing ads in some U.S. users' feeds over the next few months
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