Facebook (NASDAQ:FB), the No. 1 social networking website, reporting its first fourth-quarter results as a public company, exceeded analyst expectations as revenue jumped 40 percent and its users rose to 1.06 billion members. Nevertheless, earnings plummeted 79 percent from a year earlier.

The Menlo Park, Calif.-based company indicated its rapid growth is slowing, although it’s making inroads into mobile platforms, which now account for 23 percent of revenue. Costs of attracting and keeping new members are rising, as are expenses, which is hampering profitable operations.

Facebook said fourth-quarter net income fell to $64 million, or 3 cents per share, from $302 million, or 14 cents per year earlier. But earnings from operations were 17 cents per share, 2 cents ahead of the estimates of 35 analysts surveyed by Thomson Reuters.

Meanwhile, Facebook’s fourth-quarter revenue rose 40 percent to $1.59 billion from $1.13 billion a year earlier. Full-year net income was $53 million, or a penny per share, compared with $1 billion, or 46 cents per share, a year earlier.

“We enter 2013 with good momentum and will continue to invest in our mission and become a stronger, more valuable company,” CEO Mark Zuckerberg, 28, who controls about 56 percent of the company outright, said.

Analyst Youssef Squali of Cantor Fitzgerald said he was pleased by the report, terming it "solid," especially because of the hefty increase in advertising revenue from all sources.

CFO David Ebersman is scheduled to talk with investment analysts later on Wednesday.

Facebook said year-over-year growth in members was 25 percent, but the number hardly increased from Sept. 30, when it was about 1 billion. But advertising revenue gained 41 percent from the prior year to $1.33 billion. The company also said that due to a new method of accounting for revenue, the quarter was actually flat year-over-year.

In the mobile sector, the company said it now has 680 million monthly active users, up 57 percent from the year-earlier quarter. Overall daily active users, though, rose only 28 percent to 618 million, another sign of slowing growth.

As expenses grew, Facebook's operating margins fell sharply, to only 33 percent from 48 percent a year earlier, reflecting all sorts of higher costs, including rewarding its employees with stock options.

The company said it had $9.63 billion in cash and investments on Dec. 31.

Shares of Facebook rose 45 cents to close at $31.24 on Wednesday. They fell about 5 percent after the results were announced.

They are off 18 percent from their IPO price of $38 set on May 17 but traded as low as $17.55 in early September.