Mobile ads push Facebook Q2 revenue up 53% to $1.81 billion

SAN FRANCISCO: Facebook chief executive officer Mark Zuckerberg’s decision last year to bet big on mobile software is paying off, with sales of ads on wireless devices now on track to surpass revenue from desktop computers.

Surging demand for mobile advertising helped profit and revenue top analysts’ estimates in the second quarter yesterday. The results sent shares of the world’s most popular social-networking service up as much as 28%, a record intraday gain, to the highest level since May 2012.

The earnings may finally quiet concerns, voiced by analysts and investors since Facebook’s initial public offering last year, that the rising popularity of smartphones and tablets is outpacing its ability to make money selling promotions to mobile users.

By letting marketers show messages in the news feed on such devices, and shifting development efforts toward applications, Zuckerberg is delivering on his promise of making Facebook a “mobile-first” company, according to Jordan Rohan, an analyst at Stifel Nicolaus in New York.

“There’s latent demand for marketers to spend money on Facebook,” Rohan, who rates the shares a buy, said in an interview. “The company finally introduced the right set of ad products to facilitate that.”

Revenue rose 53% to $1.81 billion in the latest quarter, the company said in a statement. Profit excluding certain items was 19 cents a share. Analysts had projected profit of 14 cents on sales of $1.62 billion on average, according to data compiled by Bloomberg.

Blowout quarter

Facebook jumped 25% to $33.17 at 10:58 a.m. in New York, and earlier traded as high as $34. Analysts at Goldman Sachs Group increased their target price to $46 from $40, and at least 10 others also boosted projections, according to data compiled by Bloomberg.

About 192 million shares changed hands, the most since November and more than four times the average this year, the data show. “Finally, the blowout quarter that Facebook bulls have been waiting for,” said Paul Sweeney, an analyst.