Facebook share price dips as spending soars

Facebook reports positive earnings one again, but investors aren't impressed by it's expenditures.

During the second quarter, Facebook's year-on-year revenue went up 39 per cent to $4.04bn (£2.59bn), while earnings-per-share increased from 42 cents to 50 cents.

 

 

The results were marginally better than the $3.99bn revenue and 47 cents-per-share analysts expected, but there was simultaneously an 82 per cent increase in spending by the company as it focused on growing the mobile side of its business. 

 

 

During after-hours trading, Facebook shares initially dipped 4.2 per cent in value to $92.90, and are now down 0.7 per cent at £96.30.

It's been a great year so far for Facebook, which now has 1.49bn monthly active users. Yesterday, shares were up 22 per cent for the year to date when markets closed.

 

Facebook faces stiff competition from a number of smaller, newer firms, but it continues to perform better than its rivals, partly because of its dedication to shifting platforms. In April it reported that the majority of its users and almost three-quarters of its advertising revenue came from mobile devices. 

Mark Zuckerberg, founder and chief executive, commented:

 

Facebook continues to lead the social media industry, but it is having to fork out huge sums to stay ahead of its competitors. Today's spending figures for mobile reflect the dilemma it faces.