Facebook profits beat expectations as users grow

The social networking giant said profit in the first three months of 2015 was $512m (£341m), a decline of 20% from a year earlier, but that revenue increased by 42% to $3.5bn

That was better than analysts had been expecting.

A further bright spot - monthly active users increased by 13% from a year earlier to 1.44 billion.

Notably, for those investors concerned about the firm's efforts to appeal to younger users who access Facebook on their smartphones, monthly mobile users increased by 24% to 1.25 billion, a majority of the site's users.

Facebook has been particularly adept at channelling that growing mobile user base into advertising dollars. The company said that during the quarter, revenue from mobile ad sales made up nearly three-quarters of total ad sales.

"This was a strong start to the year," said founder and chief executive Mark Zuckerberg in a statement.

Despite the better than expected profits, investors are worried about slowing revenue growth - as well as increasing costs at the company, which has been spending more on its research and development costs.

Research and development expenditures increased over twofold, to $566m from $181m a year earlier.

The company has warned that those costs are set to increase, as it looks to expand some of its acquisitions including photo-sharing site Instagram, messaging service WhatsApp, and virtual reality firm Oculus Rift.

Those fears helped depress shares. In after hours trading Facebook was down by more than 2%.

(BBC)