Facebook revenue, profit beat forecasts; shares hit all-time high

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Facebook Q3 Earnings Rise Despite Higher Costs

Facebook Inc posted surprisingly strong profit and revenue growth as the world's largest social network grew even larger, with a spike in mobile users and advertising that lifted its stock to an all-time high.

The company on Wednesday reported audience numbers that suggest it is poised to take on mainstream media as an advertising force, helping investors to overlook Facebook's huge spending on hiring and building data centers.

Facebook now has 8 billion video views per day from 500 million people, compared with 4 billion views in April.

And Facebook's website and Instagram photo-sharing app, which opened up its platform to all advertisers in the third quarter, account for more than 1 in 5 minutes spent on mobile devices in the United States, Chief Operating Officer Sheryl Sandberg said.

"In the medium to long run, we believe that we're not competing between Facebook and Instagram. We're competing with other forms of media," Sandberg told analysts on a conference call after the earnings report.

Facebook had 1.55 billion monthly active users as of Sept. 30, up 14 percent from a year earlier. Of these, 1.39 billion used the service on mobile devices.

"Growth is happening across the board and we're of course looking for a lot of growth in the future in emerging markets," Sandberg said in an interview. "We're also pretty focused on helping bring the next set of people who are not online, online."

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Facebook revenue, profit beat forecasts; shares hit all-time high
The Facebook founder announced his daughter Max's birth in a note on the website. (Photo via Facebook)
Facebook CEO Mark Zuckerberg asks a question during the CEO Summit of the Americas panel discussion in Panama City, Panama, Friday, April 10, 2015. (AP Photo/Pablo Martinez Monsivais)
SAN FRANCISCO, CA - APRIL 30: (CHINA OUT, SOUTH KOREA OUT) Facebook CEO Mark Zuckerberg delivers the opening keynote at the Facebook f8 conference on April 30, 2014 in San Francisco, California. Facebook CEO Mark Zuckerberg kicked off the annual one-day F8 developers conference. (Photo by The Asahi Shimbun via Getty Images)
SAN FRANCISCO, CA - APRIL 30: Facebook CEO Mark Zuckerberg delivers the opening kenote at the Facebook f8 conference on April 30, 2014 in San Francisco, California. Facebook CEO Mark Zuckerberg kicked off the annual one-day F8 developers conference. (Photo by Justin Sullivan/Getty Images)
BARCELONA, SPAIN - FEBRUARY 24: Co-Founder, Chairman and CEO of Facebook Mark Zuckerberg speaks during his keynote conference as part of the first day of the Mobile World Congress 2014 at the Fira Gran Via complex on February 24, 2014 in Barcelona, Spain. The annual Mobile World Congress hosts some of the world's largest communication companies, with many unveiling their latest phones and gadgets. The show runs from February 24 - February 27. (Photo by David Ramos/Getty Images)
Mark Zuckerberg, founder and chief executive officer of Facebook Inc., right, leaves a meeting with members of the Senate Committee on Commerce, Science and Transportation in Washington, D.C., U.S., on Thursday, Sept. 19, 2013. Zuckerberg in April announced the formation of an advocacy group, Fwd.us, to push for more visas for skilled immigrant workers. He pressed that cause yesterday in a meeting with Senator Charles Schumer, a New York Democrat. Photographer: Andrew Harrer/Bloomberg via Getty Images
SAN FRANCISCO, CA - SEPTEMBER 11: Mark Zuckerberg of Facebook attends Day 3 of TechCrunch Disrupt SF 2013 at San Francisco Design Center on September 11, 2013 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)
Mark Zuckerberg, chief executive officer and founder of Facebook Inc., walks with his wife Priscilla Chan while arriving for a morning session during the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, U.S., on Thursday, July 11, 2013. Executives from media, finance and politics mingle at the mountain resort between presentations on business trends and social issues, brought together by New York investment banker Herb Allen. Photographer: Daniel Acker/Bloomberg via Getty Images
Facebook CEO Mark Zuckerberg delivers a speech during a workshop for application developers in Jakarta, Indonesia, Monday, Oct. 13, 2014. On his first visit to Facebook-crazy Indonesia, Zuckerberg met the president-elect, spread the word about his company's global Internet-access initiative and posted a photo of himself at an ancient Buddhist temple. (AP Photo/Achmad Ibrahim)
Priscilla Chan and Mark Zuckerberg arrive at the 2nd Annual Breakthrough Prize Award Ceremony at the NASA Ames Research Center on Sunday, Nov. 9, 2014 in Mountain View, California. (Photo by [Peter Barreras]/Invision/AP)
Facebook CEO Mark Zuckerberg speaks to students during an special assembly at Sequoia High School in Redwood City, Calif. on Thursday, Sept. 18, 2014. Zuckerberg participated in the assembly as part of Facebook's campaign to encourage students to pursue careers in science, technology, engineering and math or what are otherwise known as STEM fields. (AP Photo/Alex Washburn)
Facebook CEO Mark Zuckerberg gestures while delivering the keynote address at the f8 Facebook Developer Conference Wednesday, April 30, 2014, in San Francisco. (AP Photo/Ben Margot)
Mark Zuckerberg, co-founder and chief executive officer of Facebook Inc., arrives to a Bloomberg television interview at Facebook headquarters in Menlo Park, California, U.S., on Tuesday, Dec. 2, 2014. Facebook made further headway in mobile in 2014, a business that has flourished from a minor portion of ad revenue at the time of the company's initial public offering to a majority. Photographer: David Paul Morris/Bloomberg via Getty Images
Mark Zuckerberg, co-founder and chief executive officer of Facebook Inc., left, chats with a reporter prior to a Bloomberg television interview at Facebook headquarters in Menlo Park, California, U.S., on Tuesday, Dec. 2, 2014. Facebook made further headway in mobile in 2014, a business that has flourished from a minor portion of ad revenue at the time of the company's initial public offering to a majority. Photographer: David Paul Morris/Bloomberg via Getty Images
Mark Zuckerberg, co-founder and chief executive officer of Facebook Inc., speaks prior to a Bloomberg television interview at Facebook headquarters in Menlo Park, California, U.S., on Tuesday, Dec. 2, 2014. Facebook made further headway in mobile in 2014, a business that has flourished from a minor portion of ad revenue at the time of the company's initial public offering to a majority. Photographer: David Paul Morris/Bloomberg via Getty Images
MOUNTAIN VIEW, CA - NOVEMBER 09: Mark Zuckerberg attends the 2014 Breakthrough Prize Awards at NASA AMES Research Center on November 9, 2014 in Mountain View, California. (Photo by C Flanigan/FilmMagic)
MOUNTAIN VIEW, CA - NOVEMBER 09: Breakthrough Prize Co-Founders Priscilla Chan and Mark Zuckerberg attend. the Breakthrough Prize Awards Ceremony Hosted By Seth MacFarlane at NASA Ames Research Center on November 9, 2014 in Mountain View, California. (Photo by Kimberly White/Getty Images for Breakthrough Prize)
Mark Zuckerberg (L), founder and CEO of Facebook, makes a courtesy call to Japanese Prime Minister Shinzo Abe (R) at the latter's official residence in Tokyo on October 20, 2014. Zuckerberg is here to attend a Facebook's business event for their partner companies on October 16 as a surprise guest. AFP PHOTO / POOL / KAZUHIRO NOGI (Photo credit should read KAZUHIRO NOGI/AFP/Getty Images)
Mark Zuckerberg (L), founder and CEO of Facebook, makes a courtesy call to Japanese Prime Minister Shinzo Abe (R) at the latter's official residence in Tokyo on October 20, 2014. Zuckerberg is here to attend a Facebook's business event for their partner companies on October 16 as a surprise guest. AFP PHOTO / POOL / KAZUHIRO NOGI (Photo credit should read KAZUHIRO NOGI/AFP/Getty Images)
JAKARTA, INDONESIA - OCTOBER 13: Facebook founder Mark Zuckerberg (R) gives a press conferrence after meeting with Indonesian President-elect Joko Widodo on October 13, 2014 in Jakarta, Indonesia. Mark Zukerberg is visiting Indonesia to attend Internet developers summit and meet heads of goverment. Indonesia is a country that has a population of 240 million and has approximately 60 million active users of social media (Photo by Oscar Siagian/Getty Images)
JAKARTA, INDONESIA - OCTOBER 13: Indonesian President-elect Joko Widodo (L) with Facebook founder Mark Zuckerberg (R) at Tanah Abang Market the biggest textile market in South East Asia after meeting on October 13, 2014 in Jakarta, Indonesia. Mark Zukerberg is visiting Indonesia to attend Internet developers summit and meet heads of goverment. Indonesia is a country that has a population of 240 million and has approximately 60 million active users of social media (Photo by Oscar Siagian/Getty Images)
JAKARTA, INDONESIA - OCTOBER 13: Facebook founder Mark Zuckerberg (R) gives a press conferrence after meeting with Indonesian President-elect Joko Widodo (L) on October 13, 2014 in Jakarta, Indonesia. Mark Zukerberg is visiting Indonesia to attend Internet developers summit and meet heads of goverment. Indonesia is a country that has a population of 240 million and has approximately 60 million active users of social media (Photo by Oscar Siagian/Getty Images)
Facebook founder Mark Zuckerberg (L) walks with unidentified staff as he arrives for the launch promoting the Internet.org app in Jakarta on October 13, 2014 which allows people in underdeveloped areas to access basic online services. US-based social media Facebook founder Zuckerberg met with Indonesian President-elect Joko Widodo. Indonesia, has the fourth-largest number of Facebook users in the world. AFP PHOTO / ROMEO GACAD (Photo credit should read ROMEO GACAD/AFP/Getty Images)
CORRECTION Indonesian President-elect Joko Widodo (L) walks next to Facebook founder Mark Zuckerberg after a meeting in Jakarta on October 13, 2014. US-based social media Facebook founder Zuckerberg held a meeting with Indonesia president-elect Joko Widodo and attended internet.org campaign in his visit to Indonesia, the fourth-largest number of Facebook users in the world. AFP PHOTO / ADEK BERRY (Photo credit should read ADEK BERRY/AFP/Getty Images)
Mark Zuckerberg, chief executive officer of Facebook Inc., speaks during the Internet.org summit in New Delhi, India, on Thursday, Oct. 9, 2014. Zuckerberg said a lack of relevant local language content is the biggest barrier to the 4.4 billion people globally who don't have Internet access. Photographer: Udit Kulshrestha/Bloomberg via Getty Images
Mark Zuckerberg, chief executive officer of Facebook Inc., speaks during the Internet.org summit in New Delhi, India, on Thursday, Oct. 9, 2014. Zuckerberg said a lack of relevant local language content is the biggest barrier to the 4.4 billion people globally who don't have Internet access. Photographer: Udit Kulshrestha/Bloomberg via Getty Images
Mark Zuckerberg, chief executive officer of Facebook Inc., speaks during the Internet.org summit in New Delhi, India, on Thursday, Oct. 9, 2014. Zuckerberg said a lack of relevant local language content is the biggest barrier to the 4.4 billion people globally who don't have Internet access. Photographer: Udit Kulshrestha/Bloomberg via Getty Images
Mark Zuckerberg, chief executive officer and founder of Facebook Inc., right, talks on the phone while arriving for a morning session his wife Priscilla Chan at the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, U.S., on Thursday, July 10, 2014. Technology companies from Silicon Valley are expected to take center stage at this year's Allen & Co.'s Sun Valley conference as tech and media converge. Photographer: Daniel Acker/Bloomberg via Getty Images
SUN VALLEY, ID - JULY 10: Mark Zuckerberg, chief executive officer and founder of Facebook Inc., attends the Allen & Company Sun Valley Conference on July 10, 2014 in Sun Valley, Idaho. Many of the world's wealthiest and most powerful businessmen from media, finance, and technology attend the annual week-long conference which is in its 32nd year. (Photo by Scott Olson/Getty Images)
Mark Zuckerberg, chief executive officer and founder of Facebook Inc, delivers a speech during a conference at the National Auditorium in Mexico city, on September 5, 2014 in the framework of Telmex foundation's 'Mexico Siglo XXI' forum, owned by Mexican tycoon Carlos Slim. AFP PHOTO/RONALDO SCHEMIDT (Photo credit should read RONALDO SCHEMIDT/AFP/Getty Images)
Bicycles are festooned with the Facebook logo during the Facebook Fit "Small Business Boot Camp" at Austin Music Hall, on Thursday, July 24, 2014 in Austin, Texas. (Photo by Darren Abate/Invision for Facebook/AP Images)
A man uses an iPhone to photograph the Facebook logo displayed at Nasdaq, Friday, May 18, 2012, in New York. The social media company priced its IPO on Thursday at $38 per share, and beginning Friday regular investors will have a chance to buy shares. (AP Photo/Richard Drew)
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Market research firm FactSet StreetAccount had predicted 1.53 billion monthly active users, with 1.36 billion on mobile.

Ad revenue grew 45.4 percent to $4.30 billion, with 78 percent of that coming from mobile versus 66 percent in the year-ago quarter.

"Part of the upside came from Instagram. The Instagram monetization engine has been turned on really rapidly for the coming quarters and years," said Arvind Bhatia, an analyst with SterneAgee.

Facebook did not disclose Instagram's ad sales figures. But the app is expected to bring in $595 million in mobile ad revenues this year, research firm eMarketer said. Its ad revenue is projected to grow to $2.8 billion by 2017.

Facebook's huge $3.0 billion spending, up 68 percent from the third quarter last year, did not seem to worry investors or analysts.

"I think the investors would like the company to continue to invest given that the opportunity is pretty large," said Shyam Patil of Susquehanna Financial Group.

The stock rose about 5 percent to an all-time high of $109.34 in extended trading, before paring gains to about 4 percent. It closed earlier at $103.94.

Total revenue jumped to $4.50 billion in the third quarter, from $3.20 billion a year earlier. Analysts had expected revenue of $4.37 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to stockholders rose to $891 million, or 31 cents per share, from $802 million, or 30 cents per share.

Excluding items, the Menlo Park, California-based company earned 57 cents per share, ahead of analysts' average estimate of 52 cents per share.

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