Facebook reports $7B profit, user growth despite challenges

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Facebook had a strong fourth quarter as it made more money on advertising and added more users despite challenges around regulation and efforts to fight election interference.

Profit and revenue both handily surpassed Wall Street’s expectations.

The company has had a rough couple of years and is under growing regulatory scrutiny around the world. In the U.S., it faces several government investigations for alleged anti-competitive behaviour.

Last August, it was fined $5 billion by the Federal Trade Commission for privacy violations, the largest FTC fine ever for a tech company.

“This is a company that has shown that it can withstand ongoing criticism of its practices and yet still pull out gains in both revenue and users,” said eMarketer analyst Debra Aho Williamson.

Facebook said Wednesday it earned $7.35 billion, or $2.56 per share, up 7% per cent from $6.88 billion, or $2.38 per share, a year earlier. Revenue rose 25% to $21.1 billion from $16.9 billion.

Analysts were expecting earnings of $2.52 per share and revenue of $20.9 billion, according to FactSet.

Facebook said that about 2.89 billion people use at least one of its services — Facebook, WhatsApp, Instagram or Messenger – each month. About 2.26 billion people use one every day. The Menlo Park, California, company said its main service had 2.5 billion monthly users at the end of the year, up 8% from a year earlier.

Facebook’s stock dropped more than 6% in after-hours trading after the results came out. Some investors may be concerned about the company’s growing expenses, while others could simply be cashing out following a record high for the stock earlier in the day.

 

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