Facebook Revenue Surges Nearly 50% -- Update
April 25 2018 - 5:02PM
Dow Jones News
By Deepa Seetharaman
Facebook Inc. recorded rising revenue and profits in the first
quarter as advertisers were undeterred by controversies around the
site's mishandling of user data and struggles to police its
platform.
The social-media giant reported a quarterly per-share profit of
$1.69, up from $1.04 a year earlier, while revenue rose nearly 50%
to $11.97 billion. Net income rose 63% to nearly $5 billion,
compared with $3.06 billion a year ago.
Analysts expected Facebook to report a per-share profit of $1.35
and quarterly revenue of $11.41 billion, according to data compiled
by Thomson Reuters.
Facebook added about 70 million monthly users during the first
three months of the year bringing its overall user base to 2.2
billion, up from 2.13 billion at the end of 2017.
Advertising revenue, the main driver of Facebook's top line,
rose to about $11.8 billion in the first quarter, up 50% from the
$7.86 billion collected a year ago. A hefty 91% of that amount was
from mobile advertising, up from 85% the year earlier.
Facebook's earnings report marks the first detailed look into
how the company's ties to political data firm Cambridge Analytica
are affecting the Silicon Valley giant's business.
Cambridge Analytica aided the Trump campaign in 2016 and
allegedly bought data about tens of millions of Facebook users from
an outside developer. The incident, disclosed in mid-March,
highlighted Facebook's at times lax oversight of how outside
developers handled user data they extracted from the platform.
Cambridge Analytica has denied wrongdoing.
Facebook Chief Executive Mark Zuckerberg appeared twice in front
of U.S. lawmakers this month in hearings centered on the
controversy, and Facebook has redoubled efforts to stamp out abuse.
Still most analysts and investors believe additional regulation is
inevitable, although it isn't clear what form it will take or what
impact it would have on Facebook's bottom line.
Mr. Zuckerberg told lawmakers this month that he was open to
some forms of regulation but added that too many rules could impede
American tech companies from competing head-to-head with Chinese
rivals.
The uproar over Cambridge Analytica is the latest episode to
spark widespread questions over Facebook's imprint on society. The
period since the 2016 presidential election has been among the
rockiest in the company's 14-year history, with users, advertisers
and lawmakers questioning whether the company sacrificed security
and privacy in pursuit of relentless growth.
Since reaching an all-time high in early February, Facebook
shares have fallen more than 18%.
In after-hours trading Wednesday, Facebook shares rose 4.3% to
$166.57.
Earlier this week, Facebook's biggest rival in the online-ad
space, Google parent Alphabet Inc., reported profits for the first
three months of the year that topped expectations, but investors
grappling with the company's higher expenses sent the shares down
4.8%, the stock's worst session in more than two months.
Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
April 25, 2018 16:47 ET (20:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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