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Facebook shares jump after earnings beat
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Loading...Facebook shares rose in extended trading on Wednesday after the company reported better-than-expected earnings and revenue for the second quarter.
User growth at Facebook, which owns Instagram and WhatsApp, was in line with expectations.
Earnings: $1.99 cents per share vs. $1.88 per share, forecast by Refinitiv
Revenue: $16.9 billion, vs. $16.5 billion, forecast by Refinitiv
Daily active users: 1.59 billion, vs. 1.59 billion forecast by FactSet
Monthly active users: 2.41 billion, vs. 2.41 billion forecast by FactSet
Average revenue per user: $7.05 vs. $6.87 forecast by FactSet
On Wednesday, Facebook struck a $5 billion settlement with the Federal Trade Commission following the 2018 Cambridge Analytica scandal in which the data of 87 million Facebook users was improperly accessed. And late Tuesday, the Department of Justice announced a broad antitrust review of the dominant tech platforms.
The company said it counts more than 2.7 billion monthly users across the its family of apps, up slightly compared to the previous quarter. Facebook saw its user base in Europe remained flat quarter-to-quarter at 286 million daily active users. The company’s user base in the U.S. and Canada was 187 million, up slightly compared to 186 million in the prior quarter. The company said average revenue per user was $7.05, up 18% from $5.97 a year ago.
Facebook’s business continues to grow at a rapid clip. The company is undergoing a major transition from News Feed ads as it expands ad revenue from its newer Stories products. Already, Facebook says it has more than 500 million daily users for the Stories features across Facebook, Instagram, WhatsApp and Messenger.
In a March memo, CEO Mark Zuckerberg wrote that the future of Facebook will be “private, encrypted services.” The company is working to integrate the messaging functions of WhatsApp, Messenger and Instagram, and Zuckerberg said he expects “Messenger and WhatsApp to become the main ways people communicate on the Facebook network.” Investors will be looking for signs it can shift its business to focus more on privacy while continuing to grow revenue and its user base.
Facebook shares are up 54% in 2019.
Source: CNBC
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