Facebook Shares Leap 22% At Open After Beating Analyst Estimates

In early trading, Facebook shares rose $4.32 to $23.82 and kept trading around that level after the first hour. They were priced at $38 in their initial public offering on May 17 and closed at $38.23 on May 18, the first day of public trading.

As well, Citi Research analyst Mark Maheny upgraded his recommendation on Facebook shares to ?buy? from ?hold? after listening to CEO Mark Zuckerberg Tuesday night explain growth for the company.

So did Jordan Rohan, analyst with Stifel Nicolaus, who was especially pleased that Facebook's revenue from mobile platforms jumped to $153 million in the third quarter, or about a quarter of overall revenue.

"We're only just getting started on mobile," said Zuckerberg on the investor call. "On mobile, we believe ads will be more like TV, hgh-quality and integrated into the experience, rather than off to the side."

Facebook reported a third-quarter net loss of $59 million as revenue rose 32 percent to $1.26 billion. The Menlo Park, Calif., company reported having 1.01 billion members, compared with 945 million in June 30.

Facebook?s performance on operations was profitable, although the $377 million operating profit was 9 percent below the prior year's $414 million. On an operating basis, there was net gain of 12 cents per share, a penny ahead of the analyst estimates carried by Thomson Reuters.

?People who use our mobile products are more engaged,? said Zuckerberg. ?And we believe we can increase involvement even further.? The company also reported cash and investments exceeding $10.5 billion.

Analyst Brian Pitz at Jefferies, which didn't participate in Facebook's IPO, maintained a "buy" recommendation on Facebook but raised his price target to $32 from $30, mainly because of growth in mobile advertising.

"We are encouraged Facebook could deliver this kind of growth without much help from new products like Offers," he said. Pitz also liked the report that user engagement with the site had risen.

Monthly active users rose 26 percent from a year ago, nearly 60 percent of members logged in daily, and overall ad revenue rose 36 percent to $1.06 billion, more than the predicted $1.06 billion, Pitz said.

Source: http://www.ibtimes.com/facebook-shares-leap-22-open-after-beating-analyst-estimates-853003

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