Facebook Profit Falls 9 Percent as Costs Soar

Advertisement
By Reuters | Updated: 30 July 2015 09:28 IST
Facebook Inc reported quarterly revenue that beat forecasts but its profit fell 9 percent as the social media company sharply increased spending to boost mobile revenue and future growth.

Expenses will grow 55 to 60 percent in 2015 from last year, including an 82 percent jump in the second quarter to $2.77 billion, it added.

"We're investing in the next set of services and what will be future investments like Messenger, WhatsApp and Oculus," Chief Operating Officer Sheryl Sandberg said in an interview on Wednesday after the earnings report. She was referring to Facebook's two messaging services and virtual reality headset maker Oculus Rift, whose first product for consumers has yet to be launched.

Messenger has more than 700 million users, and the app has been downloaded more than 1 billion times on Android, Google Inc's mobile operating system, Facebook said.

Advertisement

Over the coming months, Facebook will add new advertising formats to photo-sharing app Instagram, which was launched in Brazil, Germany and Japan in the second quarter, Sandberg added on a conference call.

Advertisement

Macquarie Research analyst Ben Schachter said the costs and spending met expectations. "We think the company has a lot of opportunities ahead of it so we want to see them investing quite heavily in those investments," he said.

Facebook shares fell more than 3 percent in after-hours trading. As of Wednesday's close of $96.99, the stock has risen 24.3 percent this year, valuing the company at $276.4 billion.

Advertisement

Facebook, the world's largest social network, continued to expand its reach, hitting 1.49 billion monthly active users as of June 30, up 13 percent from a year earlier. Of these, 1.31 billion accessed the service through mobile devices, a rise of 23 percent.

Daily active users increased to 968 million in June, up 17 percent from the same month last year.

Advertisement

Market research firm FactSet StreetAccount had predicted 1.48 billion monthly active users, with 1.29 billion on mobile, and 960 million daily active users.

"It's particularly impressive that users are more engaged than ever before - that the percentage of monthly users who visit every day continues to grow," said Nate Elliott, an analyst with Forrester Research.

For the quarter, revenue jumped to $4.04 billion from $2.91 billion.

Net income attributable to stockholders fell to $715 million, or 25 cents per share, from $788 million, or 30 cents per share, a year earlier.

Excluding items, the Menlo Park, California-based company earned 50 cents per share. Analysts on average had expected earnings of 47 cents per share on revenue of $3.99 billion, according to Thomson Reuters I/B/E/S.

Excluding the impact of the stronger dollar, revenue would have been about $33 million higher.

Advertising revenue grew 43 percent to $3.83 billion. Mobile ads accounted for 76 percent of that, up from 62 percent in the same quarter last year. The average price paid per ad rose 220 percent while total ad impressions, a measure of the number of times an ad is viewed, fell 55 percent.

© Thomson Reuters 2015

 

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Facebook, Social
Advertisement

Related Stories

Popular Mobile Brands
  1. DeepSeek-OCR Could Change How AI Reads Text From Images
  2. OnePlus 15 Camera Details Revealed Ahead of October 27 Launch
  3. Apple's M5-Powered MacBook Pro 14-inch, iPad Pro Now Available in India
  4. iQOO Neo 11 Key Specifications Tipped Ahead of Launch in China
  5. These Are the 5 Biggest OxygenOS 16 Features You Should Know About
  6. BSNL Samman Plan For Senior Citizens Announced at This Price
  7. OnePlus 15 India Launch Teased; Key Features Revealed Ahead of Launch
  8. Oppo Reno 15 Pro Max Could Launch Soon With These Camera, Display Features
  9. Samsung Galaxy XR Headset Launched With Hand Tracking at This Price
  10. Nubia Z80 Ultra Launched With 7,200mAh Battery, Snapdragon 8 Elite Gen 5
  1. Avatar: Frontiers of Pandora's Free Update With Third-Person Mode, New Game+ Arrives December 5
  2. Netflix Wants to Use AI Across Its Entire From Platform to Content Production Pipeline
  3. OnePlus 15 Price Leaked Ahead of Launch in Global Markets; Could Cost Less Than OnePlus 13 at Launch
  4. Apple to Launch iPhone 20, iPhone 18e in H1 2027 to Commemorate 20th Anniversary of iPhone: Report
  5. Nubia Z80 Ultra Launched With 7,200mAh Battery, Snapdragon 8 Elite Gen 5: Price, Features
  6. Apple's 18-Inch Foldable iPad Said to Be Delayed; Could Launch in 2029 With Hefty Price Tag
  7. Bitcoin Slumps to $108,000 as Traders Await US CPI Data
  8. Amazon Is Reportedly Planning to Replace Half a Million Workers With Robots and Automation
  9. OnePlus 15 Camera Details Revealed; Confirmed to Sport 50-Megapixel Periscope Telephoto Lens
  10. Nintendo to Host a Second Kirby Air Riders Direct Presentation This Week
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2025. All rights reserved.