Facebook earnings slightly above Wall Street estimates

The company posts better-than-expected third-quarter earnings, with 14 percent of its advertising revenue now coming from mobile. The stock rallies 7 percent in after-hours trading.

Paul Sloan Former Editor
Paul Sloan is editor in chief of CNET News. Before joining CNET, he had been a San Francisco-based correspondent for Fortune magazine, an editor at large for Business 2.0 magazine, and a senior producer for CNN. When his fingers aren't on a keyboard, they're usually on a guitar. Email him here.
Paul Sloan
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Facebook reported third-quarter earnings that came in slightly above Wall Street's estimates, and said that 14 percent of its ad revenue now comes from mobile devices.

Adjusted earnings per share came in at 12 cents in the third quarter ended September 30, a penny higher than analysts were expecting. Revenue rose more than 32 percent from the year-ago quarter, to $1.26 billion. That was also a bit higher than the Street's estimates.

Facebook's stock, which has been trading around $19 a share -- half of its May IPO price of $38 a share -- closed up slightly today at $19.42. Shares jumped more than 7 percent in after-hours trading.

In a statement, Facebook CEO Mark Zuckerberg cut right to the issue on Wall Street's mind: mobile.

"As proud as I am that a billion people use Facebook each month, I'm also really happy that over 600 million people now share and connect on Facebook every month using mobile devices," said Zuckerberg. "People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform. At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company."

The company will hold a conference call at 2 p.m. PDT, and analysts will want Zuckerberg and his team to reveal more about the effectiveness of its ads. Even as Facebook is taking steps into new areas -- such as Facebook Gifts and Facebook Offers -- for now it's almost entirely an ad business. There are high expectations from Facebook Exchange, which lets advertisers better target users on Facebook by tracking what else they do across the Web.

Revenue from advertising was $1.09 billion for the quarter and made up 86 percent of the company's total sales. Payments and other fees -- that's largely money from people playing Zynga games -- made up the rest.