Facebook’s third quarter earnings report came in just above Wall Street estimates. Facebook reported sales of nearly $1.3 billion for its third quarter. This was an increase of 32% from the same period last year. Facebook earned $1.1 billion from ad sales in the third quarter, up 36% from last year. Facebook’s monthly active users now number just over 1 billion, representing a 26% yearly gain.
The company took a $431 million income tax provision related to the company’s equity compensation for employees in the quarter. This represented an astronomical 116% effective tax rate. Stripping out the tax bill and other equity compensation expenses, Facebook had net earnings of $311 million. This was slightly ahead of analysts’ expectations. The tax bill pushed Facebook to a net loss of $59 million. The company posted a gain of $227 million in the year-ago quarter.
The company’s sluggish transition to mobile is one of biggest problems. The site was not built with mobile in mind. Facebook still is not showing mobile users as many ads as it would if accessed on a desktop. The company said 14% Facebook’s ad revenue came from mobile in the third quarter. Its mobile customer base rose to 604 million active users, up 61% from last year.
CEO Mark Zuckerberg struck a defensive tone on a post-earnings conference call with analysts. Zuckerberg complained that company watchers were looking at numbers from earlier in the year, “when we weren’t really trying yet” on mobile, and called the mobile problem overblown, saying “our opportunity on mobile is the most misunderstood aspect of Facebook today.”
A new iOS app for Facebook launched in August. In September, Facebook unveiled a new feature called Facebook Gifts that lets users send friends physical goods. In October, it released a “Promote” feature that lets Facebookers pay a fee to promote important pictures or announcements.