Facebook, Inc. Q1 Earnings, Revenue Top Analysts' Expectations


"Everybody keeps talking about how bad things are for Facebook, but this earnings report to me is very positive, and reiterates that Facebook is fine, and they'll get through this", said Daniel Morgan, senior portfolio manager at Synovus Trust Company.

Despite the strong results, Facebook shares closed unmoved Wednesday.

A recent drop in its North American users was reversed, the company added, stating that American and Canadian users had grown by 1 million individuals to 185 million over the last quarter alone.

Facebook's revenue, which largely derives from ads, soared 49 percent to $12 billion in the first three months of the year, the company announced today.

The number of daily active users in Canada and the US - its most lucrative advertising demographic - rose by 100,000 from the previous quarter to 185 million.

But advertisers have shrugged off the scandals in the aggregate.

Chief Financial Officer David Wehner told analysts on a call that expenses this year would grow between 50 percent and 60 percent, up from a prior range of 45 percent to 60 percent.

"People want [Facebook] to be more about friends and family and less about content consumption", he said. The category includes efforts to root out fake accounts, scrub hate speech and take down violent videos. Facebook has 27,742 employees, up 48 per cent from a year ago.

Visitors take photos in front of the Facebook logo at the company's headquarters in Menlo Park, Calif., on March 28, 2018.

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On Tuesday, Facebook announced Kevin Martin, a former Republican chairman of the Federal Communications Commission, would become its interim head of USA policy, replacing chief privacy officer Erin Egan, as the company continues to grapple with the political fallout from the Cambridge Analytica controversy.

Shares [NAS:FB] rose about 7% to $US170.80. Analysts were calling for the network to bring in adjusted earnings of $1.35 per share, according to data compiled by Thomson Reuters.

The company's revenue was expected to grow more than 40 percent from the same period a year ago, to $11.4 billion.

Facebook topped market forecasts for revenue and earnings in the three months to March 31, joining rival Google in doing much better than anyone had thought.

Smartphones and other mobile gadgets are designed around apps, instead of people, the Facebook CEO explained.

"Cambridge Analytica's research showed that the personality types licensed by the Kogan data underperformed when compared to more traditional ways of grouping people by demographics", Mitchell said during a press conference on Tuesday.

Facebook Inc. has been embroiled in one controversy after another. It had initially authorized repurchases up to $6 billion.

The scandal, at least for now, hasn't resulted in any significant loss in users for the California-based social media giant.

Taking a tough stance against Cambridge Analytica's "unsatisfactory, cryptic and evasive" response to its first notice, the latest government notice has also asked the company to "responding fully, adequately and transparently" to the earlier queries with more details.