Facebook net income jumps to $1.51bn

Mark Zuckerberg’s tech giant tripled its earnings in the first quarter of 2016, whilst Apple and Twitter have revealed disappointing results

Facebook net income jumps to $1.51bn

Entrepreneurs often look to tech giants for inspiration but this week has been something of a mixed bag for the world’s startup superstars. Whilst Facebook has had a cracking quarter, things have been considerably less rosy over at Apple and Twitter, which have both fallen short of expectations so far this year.

There will have undoubtedly been some champagne corks popping at Facebook: the social media company tripled its earnings in the first quarter of 2016 compared to the same period of 2015, with its net income jumping from $512m in 2015 to $1.51bn. And it certainly seems some of the strategic decisions the company has been making are paying off: $5.2bn of that rise was a result of the 57% increase in the company’s advertisement revenue.

Not satisfied with simply announcing the boost in earnings, CEO and founder Mark Zuckerberg jumped on the opportunity to request a new type of stock to be issued. The so-called ‘C Stock’ will allow investors to buy Facebook shares without getting the right to vote. If the proposition to issue the new stock is passed during the annual stockholder meeting in June, Zuckerberg is sure to lead the company he launched from his dorm in 2004 for years to come.

“We had a great start to the year,” commented Zuckerberg. “We’re focused on our ten-year roadmap to give everyone in the world the power to share anything they want with anyone.”

While the future looks bright for Facebook, Apple’s appears somewhat bleaker with a huge chunk of its earnings missing from last year. The iPhone developer revealed that the company’s net income decreased from £13.6bn in the first quarter of 2015 to $10.5bn during the same period this year. This is the first time in 13 years that Apple has reported a year-on-year decline in its quarterly earnings. Despite this, Tim Cook, CEO of Apple, said: “Our team executed extremely well in the face of strong macroeconomic headwinds.”

And Apple was not the only company to achieve disappointing results. While Twitter managed to increase its year-on-year revenue by 36% to $595m last quarter, the San Francisco-based company still missed its $608m target. In a letter to shareholders, the company stated: “Revenue came in at the low end of our guidance range because brand marketers did not increase spend as quickly as expected in the first quarter.”

Like it or not, it looks like there are some interesting times ahead for Silicon Valley’s tech giants.

Eric Johansson
Eric Johansson

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