Facebook blew past Wall Street expectations in the fourth quarter, posting adjusted earnings per share of $1.41 — that’s 7 percent above forecasts.
Revenue in the period soared 51 percent, to $8.8 billion, smashing consensus estimates of $8.5 billion.
The results calmed investors, who were spooked a quarter ago when CFO Dave Wehner unexpectedly warned that Facebook could run out of room for ads.
Those words last fall helped knock Facebook stock well below $130 a share — and it took until late last month to recover.
In after-hours trading on Wednesday, Facebook shares, on the strength of the robust fourth-quarter results, gained another 3 percent, past $137, before easing.
In an earnings call on Wednesday, Wehner repeated that ad-revenue growth was expected to “come down meaningfully in 2017.”
Investors seemed to shrug off the news earlier in the day that a federal jury in Texas ordered Facebook to pay $500 million in a trade-theft case.
The jury awarded the payment after concluding the founder of virtual-reality headset maker Oculus, which Facebook acquired for $2 billion in 2014, had violated a nondisclosure agreement with his previous employer.
Chief Executive Mark Zuckerberg, in discussing the strong results, noted the “founder’s letter” he penned five years ago — when the company went public.
The letter began by asserting “Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected.”
While the CEO said on Wednesday that he believes in those thoughts “more than ever,” Facebook’s 160 percent profit increase over the past two years suggests Zuckerberg’s social mission is also good business.
And with daily active users averaging 1.23 billion in December — up 18 percent from a year ago — it’s still a growing one, even before considering the pull of its other sites, including Instagram, Messenger and WhatsApp.
Moreover, with mobile advertising revenue now representing 84 percent of its total ad revenue last quarter, the Menlo Park, Calif., company has overcome all fears it would remain desktop dependent.
Zuckerberg said Facebook’s focus after mobile will be video — and he left no doubt the company would spend aggressively to compete for eyeballs with the likes off Snapchat and YouTube.
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