SAN FRANCISCO — Facebook shares shot up 12% after the giant social network said it earned 79 cents a share on revenue of $5.84 billion in the fourth quarter, easily topping Wall Street estimates. Facebook’s dominance in mobile advertising helped to allay Wall Street concerns over its heavy investments in messaging service WhatsApp and virtual reality unit Oculus, which have not yet generated profits.
Chief Executive Mark Zuckerberg, who returned from two months of paternity leave on Monday, has said virtual reality represents the next major computing platform. The company has also begun monetizing some of its other units, such as photo-sharing app Instagram, which surpassed 400 million users last year and began selling ads in September. Facebook said mobile ads accounted for 80 percent of total ad revenue in the quarter, compared with about 78 percent in the third quarter and 69 percent a year earlier.
Facebook topped $5 billion in quarterly revenue for the first time, up 52% from a year ago. It was also the first quarter in which Facebook posted more than $1 billion in quarterly net income.
Facebook was expected to report earnings of 68 cents a share, excluding certain expenses, up from 54 cents a year ago, according to S&P Capital IQ. Analysts expected revenue of $5.37 billion. Facebook reported earnings after the close of the market.
“Clearly the (Facebook) numbers are just stellar in terms of revenue growth, profitability, all the metrics that really matter,” said Pivotal Research Group analyst Brian Wieser. “Facebook’s numbers affirm its co-dominance of the industry with Google. These paces of growth on such large bases of preexisting revenue just remind you what remarkable gains Facebook continues to make in the industry.”