Facebook Shares Slip On Cost Growth Warning

Written By Unknown on Kamis, 30 Oktober 2014 | 00.12

A leap in mobile advertising revenue helped Facebook almost double profits in its third quarter but shares fell 10% after it warned about higher costs ahead.

The social network's figures, which confirmed profits at $801m (£496m) and a 59% jump in total revenues to $3.2bn (£1.98bn) over the three months, were well above analysts' expectations.

Mobile advertising revenue made up 66% of total ad revenue in the period - indicating Facebook is succeeding in steering advertisers to its mobile platform at a time when most of its users are using Facebook on phones and tablets.

Though Facebook's results surpassed expectations, investors sent the company's stock down by almost 11% in after-hours trading - spooked by comments during a conference call that 2015 would be a "significant" year for expenses.

Facebook said it expected costs to grow by 55% to 75% next year as it ramps up investment in its workforce, grows existing products and invests in new areas such as WhatsApp, Oculus and video.

This year, Facebook spent $22bn in cash and stock to buy the messaging service WhatsApp and about $2bn on virtual reality company Oculus.

It also re-launched Atlas, a tool for marketers to better target people across "devices, platforms and publishers" and to measure how well the ads work.

Facebook's share price had hit a record high of $81.16 on Tuesday before the results came out.

The figure is more than double its flotation price of $38.

Facebook had 1.35 billion average monthly users as of 30 September, an increase of 14% from a year earlier.


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