The Strategist

Facebook’s quarterly profit jumps by 71%

07/27/2017 - 12:50

American Facebook, which owns the world's largest social network, increased its net profit in the second quarter of 2017 by 71% due to the rapid growth in advertising revenue. "We had a good second quarter and a good first half of 2009. Our community has reached 2 billion people, and we are trying to bring together the world's inhabitants," said the founder and head of the company Mark Zuckerberg.

Anthony Quintano
Anthony Quintano
As reported in Facebook’s press release, net profit in April-June jumped to $ 3.89 billion, or $ 1.32 per share, compared to $ 2.28 billion, or $ 0.78 per share, for the same period last year. The company's revenue increased by 44.8% - from $ 6.4 billion to $ 9.32 billion. Experts interviewed by FactSet, on average, projected a net profit of Facebook at $ 1.12 per share with revenue of $ 9.2 billion.

The social network’s revenues from advertising grew by 47% - to $ 9.1 billion - in the past quarter. The company received about 87% of the revenue from advertising in the first quarter from mobile devices, compared with 84% a year earlier.

At that, Facebook keeps warning about a slowdown in the growth of advertising revenue. So far, however, these fears have not come true. At the same time, Facebook’s Chief Financial Officer David Wehner during the teleconference said that he expects a decline in advertising revenue growth in the III quarter. Besides, Facebook’s executives noted that the cost of advertising in the social network grew due to an increase in the demand from advertisers. The average placement price jumped by 24%, including due to the growth in the share of more expensive video advertising.

Facebook’s monthly audience grew by 17% in annual terms, to 2.01 billion people, with an expected increase to 1.93 billion. The number of social network users with daily account activity also increased by 17% - to 1.32 billion, coinciding with the forecast. Zuckerberg also told during a teleconference that WhatsApp's monthly audience reached 1.3 billion users, with 1 billion people using the instant messenger every day. WhatsApp Status accounts (clone of Snapchat Stories) is every day visited by more than 250 million users.

According to the estimates of eMarketer analytical firm, Facebook's net revenue in the digital advertising segment will increase by 35% in 2017 - up to $ 36.29 billion. Facebook’s shares went up by 3.3% on additional bids after the main session in New York closed on Wednesday. The company’s capitalization since the beginning of 2017 has grown by 44%, to $ 480 billion.

Analysts are improving ratings of Facebook’s shares and noting that the company's market value could exceed $ 500 billion on Thursday. Facebook will be just the fifth company in this club. Earlier, overcame a mark of $ 500 billion for the first time in its history; previously only Apple, Microsoft and Alphabet (the parent company Google) managed to reach this mark.


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