Is Facebook just too good?
The social networking giant blew past Wall Street expectations of both revenue and earnings per share for its second-quarter of 2016 earnings released Wednesday. Facebook’s stock was up by more than 6 percent in after-hours trading.
Facebook reported $6.44 billion in revenue, up 63 percent year over year, compared to $6 billion as analysts expected. Earnings per share, excluding certain expenses, reached 71 cents compared to 57 cents expected.
Not only did it crush revenues, Facebook pulled even more people into the world’s largest social network. Facebook now claims more than 1.71 billion monthly active users, up from 1.65 billion last quarter. On a daily basis, Facebook is visited by 1.13 billion users.
The big moneymaker for Facebook continues to be the smartphone. Mobile ads now account for 84 percent of ad revenue, up from 76 percent in the second quarter of 2015 and a significant bump from 79 percent reported in the last quarter.
The mobile growth is impressive, but Facebook highlighted its increasing strength in video.
“Our community and business had another good quarter. We’re particularly pleased with our progress in video as we move towards a world where video is at the heart of all our services,” Facebook CEO Mark Zuckerberg said in a statement.
Facebook’s mobile advertising is growing not only on the main app but also across its family of apps. Instagram is expected earn $3.2 billion this year, . Despite introducing an algorithm and redesigning the logo that frustrated some devoted users, the app appears to be rising in popularity.
“Its rebranding both aesthetically within the app, in the way they work with brands and influencers and with its increased mission to make analytics available to brands has made Instagram a more important tool for brands and social marketers than ever before,” Sameer Kazi, CEO at Simply Measured, a social media analytics company, wrote in an email.
Next up for revenue is WhatsApp and Messenger, both of which recently reached 1 billion monthly active users each. WhatsApp is slowly welcoming businesses onto the messaging app. More than 11,000 chatbots have been created on Facebook’s Messenger platform as of last month.
The company’s investment in virtual reality, first with a $2 billion acquisition of Oculus, is slowly starting to see results. The first consumer headset started retailing for $599 earlier this year.
In addition to a platform that runs like a well-oiled-machine, its acquisitions of Instagram, WhatsApp and Oculus make it stand out
Talk about divide and conquer. In addition to a platform that runs like a well-oiled-machine, its acquisitions of Instagram, WhatsApp and Oculus make it stand out in the forward-thinking space,” said James Gellert, CEO of Rapid Ratings, a financial health ratings company. “Diversifying assets, adding new products and maintaining a level of leverage and liquidity, has made Facebook a winner, time and time again.”
Zuckerberg also addressed several of Facebook’s bets and investments. He cautioned that while they have not reached full potential, they are meeting goals.
“We believe virtual reality can help people share richer experiences,” Zuckerberg said. “Its really early for us for VR, but were hitting important milestones.”
Facebook continues to overshadow a competitor in the social media industry. Twitter’s disappointing earnings report Tuesday sent shares down more than 10 percent in after-hours trading. While Facebook added 60 million monthly active users and 3.8 million daily active users, Twitter added only 3 million monthly active users in the last quarter.
Unlike what we saw yesterday with Twitter, which is struggling on every level, Facebook is introducing successful products that connect with both users and advertisers,” Gellert said.
Still, investors issued concern over Facebook’s connection to younger audiences. “We continue to be the best way to reach the largest global audience of teens and millennials,” said Facebook Chief Financial Officer David Wehner.
Read more: http://mashable.com/2016/07/27/facebook-e/