Facebook profit plunges 20 per cent but revenue grows

Facebook profit plunges 20 per cent but revenue grows

NEW YORK - Facebook said Wednesday that profit in the first quarter plunged 20 per cent from a year ago but revenues got a lift from robust growth in mobile advertising.

The world's biggest social network also boosted the number of users to 1.44 billion, up 13 per cent from a year earlier, including 1.25 billion accessing Facebook on mobile devices.

Net profit in the quarter for shareholders dropped to US$509 million (S$685 million), amid hefty increases in spending on research and share-based compensation.

Overall revenues jumped 42 per cent to US$3.5 billion, led by advertising gains, slightly below Wall Street forecasts, as Facebook felt the impact of a strong dollar.

Excluding the impact of foreign exchange rates, revenue would have increased by 49 per cent, the company said.

"This was a strong start to the year," said Mark Zuckerberg, Facebook founder and chief executive.

"We continue to focus on serving our community and connecting the world."

Facebook has been investing heavily in research and new projects, including a drone air fleet to deliver the Internet to remote areas of the world.

Earlier Wednesday, Facebook unveiled a new mobile application called Hello, which allows its users to see who is calling by searching the social network's vast base of members.

It also allows users to search for people and businesses on Facebook and call them using the app.

Facebook got the bulk of its revenues from advertising inserted in user feeds, especially from mobile.

Revenue from advertising was US$3.32 billion, a 46 per cent surge from a year ago. Mobile accounted for 73 per cent of this, up from 59 per cent a year earlier.

But spending grew 83 per cent from a year ago to US$2.61 billion, in line with guidance from the company.

That included more than US$1 billion on research on items such as new ad products and virtual reality, which is being integrated into Facebook offerings.

In after-hours trading, Facebook shares slipped 1.8 per cent to US$83.11 following the results.

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