Facebook results top estimates but firm loses virtual reality case

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The logos of US online social media and social networking service Facebook, which reported its profit more than doubled in the past quarter as revenues climbed and the number of users grew. Photo: AFP

Published: 6:33am, 2 Feb 2017

Facebook shares rose more than 2 per cent in after-hours trading on Wednesday as the world’s largest online social network reported higher-than-expected quarterly profit and revenue, helped by continued growth in mobile advertising.

The results offered some reassurance to investors who have been concerned since the company warned in November that ad growth would likely slow “meaningfully” due to limits on ad load - the total number of ads Facebook can show to each user.

Facebook has faced doubts about whether it can continue its runaway success in the face of such limits, as well as its absence from the Chinese market and criticism about its handling of so-called “fake news” posts during last year’s US election.

Facebook CEO and founder Mark Zuckerberg speaking during a discussion at the Global Entrepreneurship Summit at Stanford University in Palo Alto, California. Photo: AFP

The company suffered a slight setback just before the market close when a jury in Texas ordered Facebook, its virtual reality unit Oculus, and other defendants to pay a combined US$500 million to ZeniMax Media Inc, a video game publisher that says Oculus stole its technology.

Facebook shares were up 2.4 per cent at US$136.44 after the bell on Wednesday.