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Facebook continues to set records: quarterly increase in profits has amounted to 71%

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Facebook continues to set records: quarterly increase in profits has amounted to 71%
July 27
09:00 2017

The American company Facebook, which owns the most popular social network in the world, has issued a press release on its economic performance. According to this document, the company has managed to achieve impressive successes for the second quarter of 2017. So, Facebook revenue has increased to 9.32 billion US dollars (an increase is 44.8%, compared with the same indicator of the last year – 6.4 billion US dollars). The company’s net profit for the previous quarter was 3.89 billion US dollars. In terms of one share, the profit was equal to 1.32 US dollars. For the same period last year, the revenue was 2.28 billion US dollars or 0.78 US dollars in terms of one share. Thus, the increase in net profit was 71%.

These figures have surpassed the most optimistic forecasts of experts, who estimated the net profit at 1.12 US dollars (in terms of one share of the company).
The main source of the company’s revenue is advertising in the social network Facebook. In the second quarter of 2017, advertising there brought the US giant 9.1 billion US dollars. The gain was 47%.

Despite the impressive growth performance, the company’s CFO David Wehner expressed doubts that the company’s profit growth would maintain the same volume in the next fiscal quarter.
At the same time, it was also noted that the average price of advertising had increased by about a quarter. This happened for two reasons: due to the growth in demand for video advertising (which is more expensive than other types) and because of the increase in the ad price (associated with increased demand from advertisers).

Also, the general public discovered that the monthly number of regular users of the social network had grown by 17% that exceeded the expectations of analysts.
No wonder such positive news caused the price growth for the company’s shares (by 3.3% during additional bidding). At the moment the company’s capitalization is estimated at 480 billion US dollars.

It is assumed that the company will cross the 500-billion mark today, on Thursday. Only four companies in the world can boast of such financial success so far. They are Alphabet, Amazon.com, Apple and Microsoft.

The material was prepared with the participation of Andrey Majorov,
a leading analyst of the brokerage company CT Trade

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