Facebook Exceeds Wall Street Estimates With $5.38 Billion In Q1 Revenues

Facebook: Defying Expectations

FACEBOOK CEO MARK ZUCKERBERG said simply, "We had a great start to the year."

His company's Q1 results bore him out, with $5.38 billion in revenue and earnings of 77 cents per share, up from $3.5 billion during the same period last year. WALL STREET had expected reported earnings of about 62 cents per share on $5.26 billion in revenue, according to THOMSON REUTERS.

Shares in the company jumped about 9% in after-hours trading following the announcement. If FACEBOOK opens at those levels tomorrow, it would easily exceed its all-time high share price of $117.59.

FACEBOOK is also proposing the creation of new class C shares. If the proposal is approved, shareholders would get two C shares for each class A or class B share they own. This would potentially allow ZUCKERBERG to sell some of his shares while still maintaining control of the company.

"This proposal is designed to create a capital structure that will, among other things, allow us to remain focused on Mr. ZUCKERBERG's long-term vision for our company and encourage [him] to remain in an active leadership role," the company said in its earnings release.

The adoption of the proposal is subject to the approval of FACEBOOK shareholders at its 2016 annual meeting of stockholders in JUNE.

FACEBOOK also reported that monthly active users numbered 1.65 billion at the end of Q1, while WALL STREET pegged the expected number at 1.63 billion.

Mobile users increased 21% year-over-year to 1.51 billion at the end of the quarter, which also topped the average analyst estimate of 1.48 billion. WALL STREET had expected the social media giant to announce a year-over-year quarterly revenue increase of about 48%, but FACEBOOK's actual growth was 52%.

Most of that growth is attributable to FACEBOOK's $5.2 billion in advertising revenue, a 57% increase which easily topped the consensus estimate of $5.02 billion. Mobile advertising accounted for about 82% of total ad revenue in the quarter, an increase from 73% over a comparable period in 2015.

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