Social networking giant Facebook, Inc. (FB) said Wednesday after the markets closed that its first quarter profit rose a modest 6.8% from last year, as higher costs and expenses dented a 38% revenue growth.
The company's quarterly earnings per share, excluding items, missed analysts' estimate by a penny, but its quarterly revenue managed to beat analysts' forecast.
This marks the company's fourth quarterly results since going public through a much hyped IPO in May last year.
"We've made a lot of progress in the first few months of the year," said Mark Zuckerberg, Facebook founder and CEO. "We have seen strong growth and engagement across our community and launched several exciting products."
Facebook shares are currently gaining 0.77% in after hours trading after closing the day's regular trading session at $27.43, up 34 cents or 1.22%. As of Wednesday's close, the shares were trading 27.8% lower than the company's IPO price of $38.00.
The company's advertising revenue for the first quarter surged 43% year-over-year to $1.25 billion and constituted 85% of total revenue.
Facebook has now become a big hit with mobile phone users. In December, the company launched Facebook for Android 2.0 and opened Facebook Messenger to anyone with a telephone number.
Last month, Facebook unveiled a new Android app called "Home" that will bring Facebook contents right to the smartphone homepage, as the social networking giant implements new features to increase its share in the mobile ad market.
Facebook's mobile ad revenue represented about 30% of advertising revenue for the first quarter, up from about 23% of advertising revenue in the previous quarter.
At the end of the first quarter, the company had 1.11 billion of monthly active users, an increase of 23% from a year earlier. Daily active users were 665 million on average for March, up 26% from last year. Mobile monthly active users surged 54% to 751 million at March 31.
For the first quarter ended March 31, 2013, Menlo Park, California-based Facebook reported net income of $219 million, compared to $205 million for the year-ago quarter. On a per share basis, earnings for the first quarter were flat with last year at $0.09.
Excluding items, adjusted net income for the first quarter was $312 million or $0.12 per share, compared to $287 million or $0.12 per share in the prior year quarter.
On average, 34 analysts polled by Thomson Reuters expected the company to earn $0.13 per share for the first quarter. Analysts' estimates typically exclude special items.
Revenue for the first quarter rose 38% to $1.46 billion from $1.06 billion in the same quarter last year. Thirty analysts had a consensus revenue estimate of $1.44 billion for the first quarter.
Operating margin for the first quarter shrank to 26% from 36% a year ago, while adjusted operating margin for the quarter narrowed to 39% from 46% last year.
In March, the company named Mike Schroepfer as chief technology officer. He replaces Bret Taylor, who stepped down last June to found a start up and left the company following its initial public offering.
In November, online social-game developer Zynga Inc. (ZNGA) and Facebook amended their developer agreements, whereby Facebook would no longer be prohibited from developing its own games.
For comments and feedback: editorial@rttnews.com