Facebook Q1 Profit Up, Sees Signs Of Stability In Ad Revenues
Facebook Inc. (FB) Wednesday reported a first-quarter profit that increased from a year ago, reflecting growth in revenues. Earnings for the quarter fell short of Wall Street estimates, while revenues beat expectations.
However, shares of the social media giant gained over 8% in the after-hours session after the company said it saw “signs of stability” in ad revenues going forward.
Menlo Park, California-based Facebook’s first-quarter profit surged to $4.90 billion or $1.71 per share from $2.43 billion or $0.85 per share last year. On average, 40 analysts polled by Thomson Reuters estimated earnings of $1.74 per share for the quarter.
Revenues for the quarter jumped 18 percent to $17.74 billion from $15.08 billion last year. Analysts had a consensus revenue estimate of $17.48 billion for the quarter.
Daily active users were up 11 percent to 1.73 billion on average for March, while monthly active users increased 10 percent to 2.60 billion. Total advertising revenues climbed 17 percent to $17.44 billion.
Revenues of Facebook, the world’s most popular social networking site, continues to rise every quarter as companies and other firms continue to spend heavily to advertise on the social network. However, Facebook had previously warned that it cannot sustain the growth at the same rate in the future.
The company said it experienced a significant reduction in the demand for advertising, as well as a related decline in the pricing of ads, over the last three weeks of the first quarter of 2020.
Facebook said its business has been impacted by the COVID-19 pandemic and, like all companies, it faces a period of unprecedented uncertainty in business outlook.
The company said it is not providing any specific revenue guidance for the second quarter or full-year 2020, due to “increasing uncertainty in our business outlook.”
The company also optimistically added that despite initial steep decrease in advertising revenue in March, it witnessed “signs of stability” in the first three weeks of April.
FB closed Wednesday’s trading at $194.19, up $11.28 or 6.17%, on the NYSE. The stock further gained $16.51 or 8.50% in the after-hours trade.
Source: Read Full Article