Facebook Posts Strong Earnings, Revenue Growth -- Update

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)

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