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Facebook (FB) 4Q Earnings Drop 79 Pct, Yet Tops View; Shares Off

 January 30, 2013 04:31 PM

(By Balaseshan) Facebook Inc. (NASDAQ: FB) reported a 78.8 percent drop in quarterly earnings due to higher costs and expenses as well as a higher income tax provision. Despite results exceeding the Street's expectations, its shares fell 4.32 percent in the aftermarket trade.

Earnings for the fourth quarter were $64 million or $0.03 per share, lower than last year's $302 million or $0.14 per share. Adjusted earnings per share (EPS) rose to $0.17 from $0.15.

Revenue jumped 40 percent to $1.585 billion. Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have increased by 42.2 percent.

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Analysts, on average, polled by Thomson Reuters had expected EPS of $0.15 on revenue of $1.53 billion for the fourth quarter.

Revenue from advertising climbed 41 percent to $1.33 billion, while payments and other fees revenue increased 36.2 percent to $256 million.

Revenue from U.S. and Canada jumped 37.6 percent to $780 million, while Europe revenue grew 21.6 percent to $440 million. Asia revenue soared 72.2 percent to $198 million, while revenue from Rest of World climbed 92 percent to $167 million.

Monthly active users (MAUs) grew 25 percent to 1.06 billion as of December 31, 2012, while daily active users climbed 28 percent to 618 million on average for December 2012. Mobile MAUs were 680 million as of December 31, 2012, an increase of 57 percent year-over-year.

Quarterly costs and expenses were $1.06 billion, an increase of 82 percent from the fourth quarter of 2011. Excluding share-based compensation and related payroll tax expenses, adjusted costs and expenses increased 67 percent.

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Operating margin fell to 33 percent from 48 percent, while adjusted operating margin declined to 46 percent from 55 percent.

The income tax provision for the fourth quarter was $441 million, representing a 87 percent effective tax rate, driven by share-based compensation expense, a portion of which is not tax-deductible.

FB closed Wednesday's regular session up 1.46 percent at $31.24. The stock has been trading between $17.55 and $45 over the past 52 weeks.



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