Facebook soars on mobile ad revenues

The world’s largest social media service climbed a staggering 29.6 percent following the release of its second quarter earnings report. Revenues, ad sales and profits all soared above expectations, erasing last year’s $157 million dollar loss. Second quarter profits reached $333 million, or 13 cents per share. Revenues climbed more 53 percent to $1.8 billion, with ad sales soaring 61 percent to $1.6 billion. What interested investors the most was growth in mobile ad revenue, which accounted for 41 percent of total ad revenue, up from 30 percent the previous quarter.

The spike in mobile app revenue signals a profound shift in how Facebook’s 1.15 billion users are connecting to their networks. It also extinguished concerns from Goldman Sachs about the company’s future growth prospects. More people than ever are accessing Facebook on their mobile devices. Mobile platform usage is up 51 percent, as 819 million monthly users access Facebook over their mobile devices. Analysts believe mobile platforms will account for the majority of ad revenue in the second half of 2013. Over the past five quarter Facebook has gone from $0 to $2.6 billion in mobile revenues, backed by one of the best mobile ad products on the market.

Facebook shares rose to $34.36 at the end of the New York session, approaching levels not seen since its Initial Public Offering last year. Facebook shares have advanced more than 32.5 percent over the previous five days and over 1.4 percent over the previous three months.

It is expected Facebook (NASDAQ:FB) will trade above its $38 IPO sometime over the next year. The second quarter figures demonstrated that fears over its growth potential are largely premature. The social media giant’s active daily users are up 27 percent from a year ago, signalling Facebook hasn’t hit full stride yet.