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Facebook shares fall on warning of revenue squeeze

Thursday, May 04, 2017 - 01:29

Facebook has reported surging quarterly profit and revenue, helped by its fast-growing mobile ad business. But, as Sara Hemrajani reports, its shares dipped from a record high in after-hours trading as investors showed some nervousness about future earnings.

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Facebook is cementing its position as the world's biggest social network. The California company says it now has some 1.94 billion monthly users. Their clicks and likes have boosted Facebook's ad sales, especially in the lucrative mobile business. And that sent profit soaring to 3 billion dollars between January and March - a jump of 77 percent from the same period last year. But Facebook executives are sounding cautious. Warnings about cooling revenue streams and rising expenses pushed investors to sell shares in after hours trading. SOUNDBITE: Neil Wilson, Senior Market Analyst, ETX Capital, saying (English): "I think there's a sense, maybe, that we've hit the sort of top of where Facebook is at the moment. It's been growing ad revenues enormously - they're up 50 percent - but it seems to suggest advertising growth over the coming year might start to slow a little. And with the share price having risen around 15 percent in the last three months, that maybe has sparked a little bit of profit taking." Facebook is also managing a potential PR disaster. CEO Mark Zuckerberg says he's hiring 3,000 extra people to monitor content on the site. That's following the posting of several videos showing murders, suicides and other inappropriate material on its network.

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Facebook shares fall on warning of revenue squeeze

Thursday, May 04, 2017 - 01:29