July 23--MENLO PARK -- Facebook turned in another strong financial performance in its second quarter, as profit soared and revenue beat Wall Street expectations for the ninth consecutive quarter.
The world's largest social network on Wednesday reported revenue of $2.9 billion, up 61 percent from the same period a year ago, and profit of $791 million -- more than double the $333 million reported a year ago. Earnings amounted to 30 cents a share, or 42 cents a share after subtracting one-time items.
Analysts surveyed by Thomson Reuters were expecting earnings of 25 cents a share, or 32 cents a share excluding one-time items, on revenue of $2.8 billion. Just two years ago, Facebook reported a loss of 8 cents a share on revenue of $1.2 billion, in its first quarterly report as a public company.
With more than 1.3 billion monthly users, Facebook said 829 million users are visiting the site on a daily basis. As evidence of the shift to mobile devices, the company said 1.07 billion users visit the site on mobile gadgets every month.
Facebook's strong sales growth has exceeded Wall Street projections for nine quarters in a row, as the company has rapidly expanded its advertising business. Facebook is expected to draw nearly 8 percent of all digital ad spending worldwide this year, according to the research firm eMarketer.
That's still a far cry from the 32 percent share projected for Google, the industry leader. But Facebook is gaining in key segments: It's on track to garner more than 22 percent of mobile ad spending worldwide in 2014, up from 18 percent last year, while Google's share of mobile ads will remain flat at 50 percent, according to eMarketer. Facebook also passed Google last year to become the market leader for digital display ads in the United States, although Google still dominates in search advertising.
Facebook's mobile business has been boosted by selling so-called "app install" ads to makers of online games and other applications, who want Facebook users to download and try their latest products. The company has also launched its own mobile ad network, which lets developers show targeted ads to Facebook members while they're using other apps.
"Facebook has made it very clear it wants to be the very fabric of the mobile ecosystem," said Sterne Agee analyst Arvind Bhatia, in a recent report that praised Facebook's efforts to operate its own stable of free-standing mobile apps, including Instagram, Paper, Messenger and WhatsApp.
Facebook has also experimented with selling goods online: Earlier this month, it introduced a new "buy" button that desktop and mobile users can click to make purchases from selected retailers.
But some analysts note that Facebook has yet to make money from its recent initiatives -- including this year's costly purchase of WhatsApp for $19 billion and its $2 billion deal to buy Oculus VR, a maker of virtual reality gaming equipment.
"Sustaining the current revenue growth rate will be harder in the second half of the year and into 2015" unless Facebook starts to tap some of those new sources for income, warned Carlos Kirjner of Bernstein Research in a recent report.
"Facebook has demonstrated strong momentum in financial results over the past several quarters," analyst Ben Schachter wrote in a note from Macquarie Securities. But if it wants to grow more, he added, "we believe that Facebook will need to show traction in some of the new businesses still in development."
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