Facebook Inc. is on deck to post quarterly results on Wednesday after the market closes, and analysts’ consensus estimates have earnings per share pegged at 76 cents – well above the 36 cents delivered in the same period last year. Driving those profits is robust ad revenue.
For the full fiscal year, analysts at eMarketer expect the social media giant to post close to $26 billion in worldwide ad revenue, which is well ahead of the $17.1 billion posted last year. By 2017, eMarketer sees Facebook’s ad revenue topping $33 billion. And increasingly, Facebook is seeing revenue being generated outside of the U.S. as well as by mobile, said eMarketer principal analyst Debra Aho Williamson in a research note today.
Williamson said in her report that “a larger share of that total each year is coming from outside the US – 54 percent in 2016 – and mobile is accounting for more of the social network’s ad revenues as well.” Williamson expects Facebook will net “$21.98 billion in mobile Internet ad revenues from around the world, up 66.6 percent over 2015.”
The analyst said double-digit growth “will continue through at least 2018, when the company will earn $37.98 billion in net mobile Internet ad revenues.”
Williamson said Facebook is “still going pedal to the metal when it comes to building out its products and services. Its flagship service is still growing in every metric that we track, and its other services, such as Instagram, WhatsApp and Messenger, are also performing well. Oculus has had some challenges gaining traction, but these are very early days for virtual reality in general.”
With ad revenue, the analyst said Facebook is “benefiting from the work it has done to show the effectiveness of its advertising. In particular, ad products such as dynamic ads are proving popular (and successful) among retailers and travel advertisers.”
Williamson noted that Facebook “had a hiccup in September when news broke that it was overstating to marketers and advertisers the amount of time people spent watching video on its platform. Though eMarketer doesn’t believe the revelation will cause brands to pull back their Facebook spending, we expect that in the future there will be a push for more rigorous third-party measurement of ad performance on properties like Facebook.”
Meanwhile, Williamson said Instagram is “facing some challenges from Snapchat, especially in the U.S., but Instagram remains well ahead of Snapchat in both usage and ad revenue, according to eMarketer’s analysis.”
Emarketer noted that Facebook is expected to have 1.43 billion users this yeas, of which 1.23 billion use a mobile device to use its service.