Facebook reported expectation-topping first quarter revenues of $2.5bn driven largely by mobile advertisement, which accounted for $1.47bn. Profit for the quarter was $642m, up 193% year on year.
Mobile is still showing dramatic growth for Facebook with daily users of its mobile site averaging 609 million in March 2014, up 43% year on year and monthly active users were 1.01 billion, 34% higher than the same time in 2013.
Apple also beat market expectations with Q1 revenues of $45.6bn, 4.5% up on the same period last year, while profit was $10.2bn, up 7.3%. Increased iPhone sales of 43.7 million in the quarter were a big factor in the performance.
Along with the results Apple also announced it will buy back $30bn more of its own shares to add to the $60bn already confirmed, and upped its quarterly dividend 8%.
Walter Price, manager of the RCM Technology Trust, said both company’s numbers were impressive. “We were certainly impressed with the iPhone sales figures, it seems much of the surprise came from better than expected sales of the 5C and older iPhone versions,” he said. “We found Facebook’s results extremely encouraging and validating for our long-term investment thesis of continued growth in mobile advertising,” he added.
Kames Capital's North American equities manager Jonathan Parsons also saw the results as a clear boost for the two companies but not necessarily for the whole tech sector. “Facebook’s results show its success in pivoting from desktop to mobile, social ad spend is a new growth market and it will be interesting to see how long this can be sustained," he said. "I don’t think there is direct read across here for the broader tech sector beyond sentiment for new media stocks,” Parsons added.”
Despite all this, some analysts and commentators remain sceptical of Apples growth prospects if it continues to rely on updates to the iPhone rather than launching completely new, innovative product lines.
Major shareholders in Apple include Vanguard Group, BlackRock, Fidelity, Invesco, Northern Trust and Norges Bank. Facebook’s top holders also include Fidelity, Vanguard, BlackRock and Invesco as well as Baillie Gifford, Sands Capital Management and Jennison Associates.
