The social media giant Facebook (NASDAQ: FB) yet again reported robust results for Q2 on a boom in mobile advertising business. The company surpassed our estimates on both top and bottom lines for the fifth consecutive quarter, lending optimism to its future growth.
Earnings per share more than doubled to 30 cents and strongly outpaced the Zacks Consensus Estimate of 26 cents. Revenues climbed 61% year over year to $2.91 billion and surpassed our estimate of $2.80 billion (see: all the Technology ETFs here).
The performance was driven by a 67% year-over-year increase in advertising revenues. Mobile advertising revenues now account for 62% of total advertising revenue, up from 59% in the prior quarter and 30% in the year-ago quarter. The company saw remarkable growth of 19% in active users to 829 million. About three-fourths of total users came from the mobile segment, which rose 39% year over year in the second quarter.
The outlook for Facebook appears bright thanks to continued market share gain in the global digital advertising, in particular the mobile advertisement segment, which is a key growth catalyst. Facebook is expected to steal some share from Google (NASDAQ: GOOG) this year and capture 22.3% of global mobile digital ad sales up from 18% last year, as per eMarketer. Meanwhile, Google's market share in the global mobile digital ad will likely decline to 47% from 49%.
However, Facebook currently has a Zacks Rank #4 (Sell) and a poor Zacks Industry Rank in the bottom 31%, suggesting that some pain could be in store for this company and that the bullish trend might not continue for long. This is because Facebook shares surged a whopping 173% over the past one year and are ...
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