SAN FRANCISCO -- Facebook reported sales that exceeded analysts' estimates as the operator of the world's most popular social-networking service attracted more marketers with new features and mobile-advertising tools.
First-quarter sales rose 38 percent to $1.46 billion, Facebook said in a statement Wednesday. That compares with the average estimate of $1.44 billion, according to data compiled by Bloomberg.
So far this year, Facebook Chief Executive Officer Mark Zuckerberg has unveiled new software for smartphones, added tools for marketers and revamped News Feed, the first thing members see when logging onto the network of more than 1 billion. Investments in upgrades to attract more users and advertisers are beginning to pay off, according to Tom Forte, an analyst at New York-based Telsey Advisory Group.
"I'm very encouraged on how Facebook's positioning itself for mobile from both a usage and revenue standpoint," said Forte, whose firm doesn't have a rating system. "It's clear to me that the company understands the importance of mobile."
During the first quarter, mobile made up about 30 percent of advertising revenue, expanding from 23 percent during the fourth quarter.
Shares of Facebook, based in Menlo Park, declined 1.2 percent to $27.43 at the close in New York, leaving them down 28 percent since Facebook's initial public offering a year ago.
First-quarter profit excluding certain items was 12 cents a share. That compares with the average analyst projection of 13 cents. Net income attributable to shareholders rose 58 percent to $217 million, compared with $137 million a year earlier.
Facebook is projected to grab 13 percent of U.S. mobile-ad dollars this year, up from 9.5 percent in 2012, according to EMarketer. The total market will reach $7.29 billion in 2013, up 77 percent from 2012, the research firm said.
The company expanded the frequency of ads members saw on smartphones and tablets in the first quarter, according to Spruce Media, a San Francisco-based research firm.
Facebook has pushed ahead with new products to get users to spend more time using its service on mobile devices. Last month, the company introduced Home, software that integrates features more deeply into some smartphones using Google's Android operating system. The company also made improvements to a tool used by businesses to reach consumers using mobile devices.