Washington (dpa-AFX) – Shares of Facebook Inc. (FB) gained over 5 per cent in the extended trading session on Wednesday after the social networking giant’s first-quarter profit nearly doubled driven by strong ad revenue growth.
Both earnings and revenues for the quarter trounced Wall Street analysts’ estimates.
Menlo Park, California-based Facebook’s first-quarter profit surged 94 per cent to 9.50 billion dollars or 3.30 dollars per share from 4.90 billion dollars or 1.71 dollars per share last year.
On average, 38 analysts polled by Thomson Reuters estimated earnings of 2.37 dollars per share for the quarter.
Revenues for the quarter surged 48 percent to 26.17 billion dollars from 17.74 billion dollars last year.
Analysts had a consensus revenue estimate of 23.67 billion dollars for the quarter.
Daily active users were up 8 per cent to 1.88 billion on average for March, while monthly active users increased 10 per cent to 2.85 billion.
Total advertising revenues rose 46 per cent to 25.44 billion dollars.
The company said its ad revenue growth was largely driven by a 30 per cent year-over-year increase in the average price per ad and a 12 per cent increase in the number of ads delivered.
“We had a strong quarter as we helped people stay connected and businesses grow,” said Mark Zuckerberg, Facebook founder and CEO.
“We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce, and the creator economy.”
Moving ahead, the company expects advertising revenue growth to be driven by price during the rest of 2021.
Facebook expects second-quarter revenue growth to “remain stable or modestly accelerate relative to the growth rate in the first quarter.”
In the third and fourth quarters, Facebook expects revenue growth to “significantly decelerate sequentially as we lap periods of increasingly strong growth.”
FB closed Wednesday’s trading at 307.10 dollars, up 3.53 dollars or 1.16 per cent, on the Nasdaq. The stock further gained 15.97 dollars or 5.20 per cent in after-hours trading.