Facebook profits Nosedive by 51%
Facebook has reported quarterly profits sank 51 percent from a year earlier due to setting aside of $3 billion for an anticipated fine from US regulators.
The leading social network logged a profit of $2.4 billion on revenue that climbed 26 percent to $15.1 billion in the first three months of this year.
The number of monthly active users of Facebook at the end of March was 2.38 billion, up eight percent from a year ago.
Facebook estimated that it will be hit with a fine of between $3 billion to $5 billion by the US Federal Trade Commission for “user data practices” and factored that into its earnings report.
“The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome,” the California-based company said in the release.
Facebook quarterly profit would have topped Wall Street forecasts if not for the money put aside for the expected FTC fine.
“We had a good quarter and our business and community continue to grow,” said Facebook chief executive and co-founder Mark Zuckerberg.
“We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the internet.”
The latest results showed “solid performance in revenue and user growth,” said analyst Debra Aho Williamson of the research firm eMarketer.
Williamson said advertisers are staying with Facebook despite controversies that have beleaguered the social networking giant.
“While marketers may say privately that they do worry about Facebook’s problems with fake news, election meddling, privacy and more, they worry more about their own financial health, and Facebook is still a major partner in that regard,” Williamson said.
She advised advertisers to view the FTC fine revelation as a significant development that could bring about changes effecting the way they can use the social network for marketing.
Facebook shares rallied nearly six percent in after-hours trade following the results.
