Facebook Inc. tumbled the most in more than four months after predicting that the average revenue per user will decline as the social network expands in regions such as Asia where advertising spending is lower.
The shares dropped 5.5 percent to $28.11 at the close in New York, the biggest decline since Sept. 24. The stock has fallen 26 percent since an initial public offering in May, compared with an 11 percent gain for the Nasdaq Composite Index.
Worldwide, Facebook generated an average revenue of $5.32 per user last year, an increase of 6 percent from 2011, the Menlo Park, California-based company said in a regulatory filing. Global growth will decline in the first quarter of 2013, “driven by seasonality,” and may continue to slump as membership gains are bigger in Asia and other markets where ad spending lags behind the U.S., Facebook said.
“While we never modeled it, we had been hoping Facebook ad revenue could potentially increase,” Doug Anmuth, an analyst at JPMorgan Chase & Co., wrote in a research report today. He estimates that sales will fall 8 percent in the current period from the fourth quarter, driven in part by a 12 percent decline in average revenue per user.
While fourth-quarter sales topped analysts’ estimates, mobile advertising was a concern for some investors. Mobile contributed 23 percent of total ad revenue, or about $306 million, according to Facebook. That compares with 14 percent in the third quarter.