Facebook Earnings: Reason for Hope or Anxiety?

Facebook’s fourth quarter revenue climbed 40 percent year-over-year to $1.59 billion, as mobile revenues grew to make up 23 percent of the company‚Äôs total advertising revenue.

Impressively, Facebook’s mobile monthly active user base rose to 680 million, which is a 57 percent climb year-over-year.

But in after-hours trading, shares of FB initially fell precipitously, aided by news that Q4 net income fell to $64 million from $302 million in the year-ago quarter.

Although Facebook’s impressive mobile advertising numbers foreshadow a swift and promising turnaround for a company that a short time ago was branded incompetent at making money in mobile, Brian Wieser, an analyst at Pivotal Research Group, tells CNBC that it’s expensive to make money in mobile. And the corresponding “sticker shock” from higher expenses may have caused FB to initially tumble.

“It is really expensive to service mobile advertising,” Wieser said. “The fact that 23 percent of ad revenues are coming from mobile means their operating expenses are going to be higher.”

Facebook plans to hire aggressively in 2013 and it will be a year of significant investment, CFO David Ebersman said on the call. As a result, he said they expect expenses to grow by around 50 percent this year.

Although Facebook has bounced 75 percent off of its all-time lows last year, questions linger about the company’s ability to practically sustain its mobile monetization efforts. Given that shares are still substantially lower than the company’s IPO price of $38, investor doubts remain a concern.

Did today’s earnings report and its corresponding details give you reason for optimism or anxiety about the future of Facebook? Please weigh in with a thought or comment below.

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