Earnings Roundup: Facebook, First Data, MasterCard (Jan. 31, 2013)
Jan. 31, 2013
Social media giant Facebook Inc. closed out its first calendar year as a public company with $1.59 billion in fourth-quarter revenue, up 40 percent from $1.13 billion in 2011’s fourth quarter, with the improvement spurred mainly by a surge in mobile ad revenue. The proportion of Facebook’s advertising revenue from mobile devices went from zero percent at the start of 2012 to 23 percent by the fourth quarter, after the company began rolling out sponsored messages that appear within users’ mobile news feeds. While mobile ad income leapt significantly, Facebook saw more sluggish growth in payments revenue through apps, such as social games, which were flat over the same quarter last year. The Facebook Gifts service, which enables users to buy digital and physical gifts for friends, contributed just $5 million to the company’s coffers.
Atlanta-headquartered payments processor First Data Corp. took in $2.8 billion in consolidated revenue in the fourth quarter of 2012, up 3 percent, or $69 million, from the final quarter of the previous year. The uptick was mainly driven by a $55 million jump in debit network fees. The company’s net loss for the quarter was $179 million, compared to a $69 million loss in Q4 2011, with the higher loss due largely to costs associated with First Data’s forming a joint venture and sluggish fourth quarter consumer spending, according to the company. The company’s retail and alliance services segment earned $931 million in revenue, up 1 percent from the previous year, with a decline in check processing offset by growth in open-loop prepaid. For the year, the segment took in $3.6 billion in revenue, up 7 percent over 2011, thanks to a 5 percent uptick in transaction and volume, lower debit interchange rates and new processing revenue. First Data also announced that Ed Labry, currently president of the company’s North American operations, will serve as interim CEO until a permanent replacement is chosen for outgoing CEO Jon Judge, who recently announced his retirement, effective March 31.
MasterCard Inc. took in $1.9 billion in quarterly revenue during the final three months of 2012, a 10 percent increase over 2011’s fourth quarter. The card network credited the improvement to a 20 percent jump in the number of processed transactions, to 9.2 billion, and a 13 percent increase in worldwide purchase volume over the previous year. The company also cited “momentum” in its global mobile payments initiatives, as well as its activities in emerging markets like Africa and Brazil, where the company has been involved in a number of new payment products. MasterCard’s quarterly profit of $605 million was up 18 percent over a year ago, excluding a litigation charge of nearly $500 million the company wrote down in Q4 2011.
