Social networking site Facebook Inc’s revenue increased 49 percent in the fourth quarter, as its mobile advertising business helped the company in defeating the targets of Wall Street for earnings and sales.
The revenue growth, however, recorded the weakest level since the beginning of 2013, while spending rose at faster pace.
The shares of world’s largest web social network declined nearly 2.6 percent in the after-hours trade during the closing price.
Facebook’s business has boomed in the recent times, thanks to its mobile advertisement segment for the tablets and smartphones.
The mobile ads of Facebook accounted for 69 percent, or USD 2.48 billion, of the advertising revenue in the fourth quarter.
The investors are optimistic about Facebook’s video ads, which it began last year, hoping that it will provide the next leg of growth to the company.
The social networking company has also warned that the current year will see heavy investments as it steps up efforts for expanding a collection of products, such as photo-sharing service Instagram, messaging service WhatsApp and virtual reality headset maker Oculus Rift.
During the fourth quarter, the revenue growth of the social site surpassed by its operating expenses, which increased nearly 87 percent as a result of sharp surges in the costs of research and development as well as marketing and sales spending.
Macquarie Research analyst Ben Schachter said, “Operating expenses are ramping up faster than we would have liked.”
The fourth-quarter revenue of Facebook increased to USD 3.85 billion from USD 2.59 billion in the year ago period.
The social networking company said that it has earned 54 cents per share, excluding certain items, during the fourth quarter. The figures have defeated the average estimates of 49 cents by the analysts.
According to the company, it ended the year 2014 with 1.39 billion users on monthly basis. 86 percent of the monthly users access its networking service on smartphones and other mobile devices like tablets.