The
world's biggest online social network bucked the trend of underwhelming
tech results from Apple Inc and eBay Inc, in the face of economic
uncertainty around the world and a strong U.S. dollar depressing the
value of overseas sales.
"It's
phenomenal at these (currency headwind) levels that they're
accelerating to that level of growth," said Rob Sanderson, an analyst at
MKM Partners.
Facebook's
dominance in mobile advertising helped to allay Wall Street concerns
over its heavy investments in messaging service WhatsApp and virtual
reality unit Oculus, which have not yet generated profits.
"I don't think there's going to
be too many people crying for them to start monetizing other properties
anytime soon because the core business is so strong," said Sanderson.
Facebook shares rose almost 12 percent in after-hours trading to $105.32.
They
were helped by Chief Financial Officer David Wehner's comment on a call
with analysts that he expected operating expenses to increase by 30 to
40 percent over the course of the year, a slower clip than last year.
Total
revenue rose to $5.84 billion from $3.85 billion a year earlier, with
ad revenue increasing 56.8 percent to $5.64 billion in the holiday
shopping period, when spending on advertising typically spikes.
Excluding
some items, the company earned 79 cents per share. Analysts on
average had expected earnings of 68 cents per share and revenue of $5.37
billion, according to Thomson Reuters I/B/E/S.
Apart
from focusing on mobile, Facebook has been ramping up spending on what
it calls "big bets," including virtual reality, artificial intelligence
and drones to connect the remotest parts of the world to the Internet.
Chief
Executive Mark Zuckerberg, who returned from two months of paternity
leave on Monday, has said virtual reality represents the next major
computing platform.
In January, Facebook began taking orders for a consumer version of the Oculus Rift, a head-mounted virtual reality unit.
The
company has also begun monetizing some of its other units, such as
photo-sharing app Instagram, which surpassed 400 million users last year
and began selling ads in September.
Facebook
said mobile ads accounted for 80 percent of total ad revenue in the
quarter, compared with about 78 percent in the third quarter and 69
percent a year earlier.
"It's much stronger ad growth than we were expecting," said Ken Sena, an analyst at Evercore ISI.
Facebook's service is not available for users in China but it can sell ads to companies there.
"It
signifies the importance of what they're providing to advertisers," he
said. "They're making big investments and evidenced by their quarterly
performance it seems to be working."
The
company, which has the world's most popular smartphone app, has also
been benefiting from a surge in video views that has attracted
advertising dollars.
Facebook
said it had 1.59 billion monthly active users as of Dec. 31, up 14
percent from the end of 2014. Of those, 1.44 billion used the service on
mobile devices, an increase of 21 percent.
Analysts
had expected the company to report 1.58 billion monthly active users,
with 1.43 billion accessing the service through smartphones and tablets,
according to market research firm FactSet StreetAccount.
Up to Wednesday's close at $94.45, Facebook's stock had risen nearly 25 percent in the past 12 months.
By: Yasmeen Abutaleb and Abhirup Roy (Reuters).
Reporting: Abhirup Roy (Bengaluru) and Yasmeen Abutaleb (San
Francisco).
Editing: Ted Kerr, Stephen R. Trousdale and Bill Rigby.
Review: Emerging Market Formulations & Research Unit, Flagship Records.
For The #FacebookTeam