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Facebook’s 2nd-quarter results surpass expectations on all fronts, stock still

In the remarks prepared for the company’s second quarter earnings call, Zuckerberg stated, “More than 968 million people worldwide now use Facebook daily and 65 percent of our monthly actives are also daily actives”.

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The figures announced by Facebook, led by founder Mark Zuckerberg, shows its growth in popularity, with 1.49bn monthly active users as of June 30, up 13pc from a year earlier.

Sheryl Sandberg, Facebook’s chief operating officer, said the huge increase in expenses would generate the “growth we need now and in the future”.

Mobile users grew faster, gaining 23 percent to 1.31 billion, but that was slower than the previous quarter’s rise. The company’s GAAP net income, however, was down 9% at $719 million compared to the year-ago quarter.

Facebook shares closed at $ 95.29 on Tuesday which is an increase of 22% this year alone. In addition, profit was up 28 percent to $1.4 billion.

Twitter has reported better-than-expected earnings, but it also warned that user growth has been suffering.

The social networking giant said that more than 700 million people are using messenger, and the application has been downloaded over 1 billiontimes through Google’s Android. Mobile ads accounted for 76 per cent of that, up from 62 per cent in the same quarter past year. That put a 9.1% squeeze on profits for the quarter to $719m.

Shares of the social network fell 4.2 percent to $92.90 in after-hours trading on Wednesday.

Mr Zuckerberg said the costs reflected “ongoing investments and improvements” it had made, such as its new data centre in Texas, which had helped reduced crashes on the network.

In one example, Sandberg said the hamburger chain Wendy’s was able to deliver specific video ads to young Facebook users or “millennials” who liked spicy foods.

Excluding special expenses such as stock compensation costs, Facebook earned 50 cents per share in the latest quarter, surpassing analysts’ expectations of 47 cents, as polled by Zacks Investment Research.

Facebook, which generates virtually all of its revenue from advertising, has systematically expanded the reach of its ads beyond the early banner units on its site.

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According to a study by the Ampere Analysis media research and analytics subscription service on which we reported last month, advertisers are willing to pay for less ad exposure on Facebook compared to YouTube, a trend that has materialized and validated the research with the posting of the recent Q2 results.

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