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Facebook revenue, profit beat forecast

Facebook Inc has posted a surprisingly strong 40.5 per cent jump in quarterly revenue as new advertising services and its mobile app boosted ad sales.

Nov 05, 2015, updated Nov 05, 2015
Facebook has become a key outlet for news - some of it fake.

Facebook has become a key outlet for news - some of it fake.

The stock rose about 5 per cent to an all-time high of $US109.34 in extended trading on Wednesday, before paring gains to about 2 per cent. It closed earlier at $US103.94.

Third-quarter profit also beat Wall Street’s average estimate despite increased spending on Facebook’s Messenger and WhatsApp apps and Oculus, its virtual reality business.

Ad revenue grew 45.4 per cent to $US4.30 billion ($A6.02 billion), with mobile ads accounting for 78 per cent of the total versus 66 per cent in the same quarter last year.

“As it matures they continue to prove they can not only effectively monetise businesses and advertising partners but they have products and services that bring significant value to users,” said Brian Blau, research director, personal technologies at research firm Gartner Inc.

Facebook continued to expand its reach, hitting 1.55 billion monthly active users as of September 30, up 14 per cent from a year earlier. Of these, 1.39 billion used the service on mobile devices.

“Growth is happening across the board and we’re of course looking for a lot of growth in the future in emerging markets,” chief operating officer Sheryl Sandberg in an interview. ”

Revenue jumped to $US4.50 billion in the third quarter, from $US3.20 billion a year earlier. Analysts had expected revenue of $US4.37 billion, according to Thomson Reuters.

“The biggest surprise coming out of the quarter was the ability to accelerate advertising revenue growth,” said analyst James Cakmak of Monness, Crespi, Hardt & Co.

“That is a testament to the demand for their platform by advertisers.”

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