Facebook Reports $59 Million Loss in Q3 2012, Share Prices Jump 8%

Facebook reported $1.26 billion in revenue for Q3 2012 in their second earnings call as a public company. Investors seemed pleased despite Facebook’s $59 million loss, compared to a $227 million profit for the same quarter in 2011, before they became a public company. Immediately after the announcement, Facebook stock rose 8 percent in after-hours trading.

Facebook just slightly beat analyst expectations; a FactSet poll predicted revenue of $1.23 billion, with $0.11 a share for Q3. One analyst, Doug Anmuth at JP Morgan, was not so optimistic. He released an earnings preview in which he estimated that Facebook would earn 12 cents a share on revenue of $1.248 billion, below other consensus estimates of 14 cents on sales of $1.366 billion.

The total revenue figure represents a 32 percent increase over Q2 2011’s $954 million. According to Facebook, revenue from mobile advertising represented 14 percent of total advertising revenue, which was $1.09 billion. Advertising revenue represented 86 percent of total revenue and a 36 percent increase from the same quarter last year.

Payments and other fees revenue for the third quarter was $176 million, a 13 percent increase over the same quarter in the prior year and a 9 percent decline sequentially from the second quarter of 2012.

Facebook’s costs also ballooned to $885 million for Q3, an increase of 64 percent from the third quarter of 2011. Excluding share-based compensation and related payroll tax expenses, non-GAAP costs and expenses were $737 million, an increase of 57 percent.

Today’s report was critical for the social network, which has lost $50 billion US in market value since its IPO in May. Since their last earnings report, which was their first as a public company, Facebook has had to deal with reports of rampant click fraud and investor concerns about the profitability of mobile ads. They’re not the only ones struggling on the mobile front, as Google disappointed investors last week with their quarterly revenue report.

Other highlights from the pre-earnings call press release include: GAAP EPS for third quarter of 2012 was ($0.02), compared to $0.10 for the same quarter in the prior year. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP net income was $311 million or $0.12 per share, compared to $273 million and $0.12 per share for the same quarter in the prior year. Purchases of property and equipment for the quarter were $171 million. Additionally, $161 million of equipment was procured or financed through capital leases during the third quarter of 2012. As of September 30, 2012, cash and marketable securities were $10.5 billion. For the third quarter, GAAP income from operations was $377 million, compared to income from operations of $414 million for the third quarter of 2011. Excluding share-based compensation and related payroll tax expenses, non-GAAP income from operations for the third quarter was $525 million, compared to $484 million for the third quarter of 2011.

On net income, Facebook reported: “GAAP income before provision for income taxes was $372 million. After the provision for income taxes, GAAP net loss for the third quarter was $59 million, compared to net income of $227 million for the third quarter of 2011. GAAP EPS for third quarter of 2012 was ($0.02), compared to $0.10 for the same quarter in the prior year. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP net income was $311 million or $0.12 per share, compared to $273 million and $0.12 per share for the same quarter in the prior year.”

Stay tuned for the highlights from Facebook’s earnings call, slated to begin at 5 p.m. ET. We will liveblog the call in the comments of this article and on the Search Engine Watch.com Facebook Page.