Facebook Posts Strong Earnings, Revenue Growth -- Update
July 24 2019 - 5:07PM
Dow Jones News
By Jeff Horwitz
Facebook Inc. pushed past a record-setting privacy fine in the
second quarter, posting strong earnings that show the resilience of
its social-media empire despite persistent negative headlines.
The tech giant recorded $16.9 billion in revenue, up 28% from a
year ago. The company posted $2.6 billion in profit, or $0.91 a
share, reflecting a one-time $2 billion charge as part of its $5
billion settlement with the Federal Trade Commission and an
accounting change regarding tax deductions for stock-based
compensation. Without those two charges, the company would have
earned $1.99 a share, beating analysts' expectations of $1.88.
Facebook's results show the duality defining the company at the
moment: It is a punching bag for critics, who pummel it for
repeated privacy missteps and misinformation on its platforms, yet
it is a darling of investors, who prize the earning power of its
targeted advertising.
The company's stock has risen more than 50% since the beginning
of the year, despite a pile of regulatory and legal challenges and
a skeptical reception for its plan to lead the creation of a global
cryptocurrency known as Libra.
Facebook shares climbed more than 3% in after-hours trading.
The FTC settlement puts new guard rails around Facebook's
management and how it approaches privacy, but it didn't severely
curtail the company's data collection and its ability to sell ads
based on it.
Facebook's earnings filings note that the FTC isn't done with
it: Facebook warned investors that the FTC launched an antitrust
investigation of the company in June. That probe will run along the
Justice Department's investigation announced Tuesday, which
Facebook said was an antitrust review of "market-leading online
platforms."
The earnings report demonstrated continued growth in Facebook's
"blue" app, its oldest and largest product. The company said 1.59
billion accounts used Facebook daily, with 2.41 billion accessing
Facebook monthly.
(END) Dow Jones Newswires
July 24, 2019 16:52 ET (20:52 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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