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Facebook narrows loss in Q3 as revenues gain

Facebook has reported a strong rise in quarterly advertising revenues and said its take from mobile users was gaining as it beat analysts’ earnings forecasts.

The world’s leading social network, with more than a billion users, impressed weary investors in its second-ever quarterly report as a public company, sending its shares climbing more than eight percent in after-hours trade to around $21.14.

The company booked a second consecutive quarterly loss, of $59 million in the third quarter, weighed down by accounting rules requiring it to set aside reserves for stock compensation.

Excluding those costs, net earnings were a positive $311 million and earnings per share hit 12 cents, one cent above analyst expectations.

Revenues totaled $1.26 billion, up 32 per cent from a year earlier and 6.7 per cent from the second quarter.

But, after months of doubts over whether the company could make money from its massive network and user database, the company touted its surge in advertising income.

Advertising brought in $1.1 billion in the third quarter, up 36 per cent from a year earlier and 11 per cent from the prior quarter.

Facebook said 14 per cent of the advertising take came from the mobile sector, the area most challenging to the company as more of its users log in on their cell phones rather than large-screen computers, where ads are more easily displayed.

“People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform,” said Facebook founder and chief executive Mark Zuckerberg.

“At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company.”

Facebook went public in May with a resounding flop, its $38 initial public offering price immediately plunging to eventually less than half that.

That angered many investors who had built hopes that the company’s huge popularity would result in huge gains in the share price.

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