Home Business Facebook profits drop sharply

Facebook profits drop sharply

has reported a sharp drop in , partly due to increased spending on research and development.

Facebook made a profit of $64 million in the final three months of 2012, compared with $302 million a year earlier.

Revenue was up 40% at $1.6 billion, largely due to a big jump in advertising revenue, a quarter of which came from mobile platforms.

Shares in Facebook fell by almost 6% in after-hours trading in New York.

The shares launched on the in May at $38, and had halved in value by September.

They have since recovered to stand at $31 at the close of trading on Wednesday. The drop in after-hours trading suggests the shares will fall back again when full trading resumes on Thursday.

“Mobile revenue was expected to be a little higher,” said analyst Aaron Kessler at Raymond James.

“Overall it’s a solid quarter but maybe [the company has suffered from] high expectations going into the quarter.”

Facebook has reported a sharp drop in profits partly due to increased spending on research and development 350x196 photo

Facebook has reported a sharp drop in profits, partly due to increased spending on research and development

Revenue from advertising was $1.3 billion, 41% up on a year earlier.

Mobile revenue, an important indicator of the company’s ability to capitalize on the growing move towards mobile platforms, accounted for 23% of overall revenue.

“In 2012, we connected over a billion people and became a mobile company,” said , Facebook founder and chief executive.

“We enter 2013 with good momentum and will continue to invest to achieve our mission and become a stronger, more valuable company.”

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Diane is a perfectionist. She enjoys searching the internet for the hottest events from around the world and writing an article about it. The details matter to her, so she makes sure the information is easy to read and understand. She likes traveling and history, especially ancient history. Being a very sociable person she has a blast having barbeque with family and friends.