April 24, 2012- On Monday, Facebook announced it earnings for the first quarter and revenue was down from the last quarter of 2011, while increased spending on product research and marketing ahead of the planned IPO helped to offset the increase in revenue.
Facebook had total revenue for the first quarter of $1.06 billion, which was up 45% from the same quarter in 2011, but lower than the revenue from the last quarter of 2011 by 6%. The decline in revenue from one quarter to the next came even though active users on a monthly basis jumped to over 900 million.
The social networking company, which earns the majority of is money from advertising, attracted potential investors from its quick growth in its advertising business, but has encountered seasonality in that advertising business.
In its regulatory filing, the company said average per user revenue declined in the first quarter by 12% from the previous quarter. The decline was attributed to seasonal trends plus user growth was much higher in markets where less revenue is generated from each user.
For the first quarter, net income was $205 million, down from the fourth quarter of last year, which registered $302 million. It was also below the $233 million posted in the same quarter of 2011. Per share earnings dropped two cents to 9 cents.
Expenses for the quarter jumped from $343 in the same quarter a year ago to $677 million.