Facebook's Mobile Move
NEW YORK (TheStreet) -- Facebook (FB) reports fourth-quarter results after Wednesday's closing bell, and all eyes will be on whether the company can continue the trend of making money from mobile or if that was just a one-time event.
Last quarter, Facebook surprised Wall Street analysts and journalists, as it generated significant revenue from its mobile efforts, which was a big question mark going into the quarter.
Since those results in late October, Facebook shares have been on a tear, gaining nearly 60%. They have drastically outperformed the Nasdaq, which is up just 4.53% in the same time frame.
Analysts polled by Thomson Reuters expect the social networking giant to earn 15 cents a share on sales of $1.53 billion in the fourth quarter. Last quarter, Facebook posted adjusted earnings of 12 cents a share on revenue of $1.26 billion.
Revenue coming from mobile devices accounted for 14% of Facebook's advertising revenue, a strong sign that bodes well for the future, said Credit Suisse analyst Stephen Ju in a note.
Ju raised estimates to reflect "incremental refinements to credit the company with its burgeoning mobile monetization." He believes that the pick-up in mobile revenue is not coming at the expense of desktop revenue, largely due to Facebook Exchange, its ad platform. Ju rated Facebook "neutral" with a $31 price target.
Mobile ad monetization may be starting to swing upward for the industry as a whole, as Google (GOOG) showed in its results earlier this month. If that is indeed the case, there could be a huge upside surprise in mobile revenue, said J.P. Morgan analyst Doug Anmuth.